Does Social Capital Affect Audit Pricing?——Evidence from private enterprises joining non-local chambers of commerce
This paper analyzes the economic consequences of private enterprises joining non-local chambers of commerce from the perspective of external audit.We find that private enterprises joining non-local chambers of commerce significantly reduce the audit fees of private enterprises.Heterogeneity analyses show that the reduction effect of joining non-local chambers of commerce on audit pricing is more pronounced in firms facing operational difficulties,being audited by the Big Four audit firms,and firms operating in regions with lower levels of marketization.The mechanism tests find that joining non-local chambers of commerce by private enterprises mainly reduces the audit fees by mitigating the operational and audit risks of private enterprises.This paper extends the study of the intersection between culture and auditing and has implications for promoting the development and growth of the private economy.
social capitalnon-local chamber of commerceprivate enterpriseaudit feeaudit risk
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