The Impacts of Motivated Fund Shareholding on Auditors'Opinion
Mutual funds serve as professional investment entities and inclusive financial instruments in capital markets.Do they play a role in corporate governance to improve corporate quality?Based on Chinese A-share listed companies from 2004 to 2020,we investigate the governance role of motivated funds from the perspective of audit opinions.We find that shareholdings by motivated funds can significantly decrease the probability of auditors'qualified opinions and the deviation of auditors'opinion,exhibiting a positive effect of addressing the root causes.Mechanism analysis reveals that shareholdings by motivated funds affect audit opinions by enhancing corporate performance,promoting information transparency,improving the levels of corporate governance,and reducing operation risks.Heterogeneity analysis indicates that the effect of shareholdings by motivated funds on audit opinions is more profound in observations requiring more external regulation.The findings provide policy implications for regulators in fostering and promoting higher-quality professional investors and intermediaries of inclusive finance.
motivated fundqualified opiniondeviation of auditors'opinioncorporate governanceinformation transparency
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