Volume 30, Issue 2, 2021
DOI: 10.24205/03276716.2020.4070
The Effects of Corporate Governance Auditing and Management Types on Investment
Abstract
This paper studies the auditing function that affect the investment in different management types of firms under the emphasizing corporate governance environment, and to understand the strategy choice of the enterpriser or the manager, and the auditor, while the firm must operate the investment project for the expanding markets. This paper is derived the equilibrium analysis by game theory, and discusses the issue of corporate governance, auditing, management types and investment.
This paper has policy implications. When the firm is operated by the manager, it can impel the auditor to maintain independence. The enterpriser retained rate is more than the stockholding rate, and the auditor's auditing fee is highly, they are the signal that the enterpriser chooses the unfavorable investment project for investors. The more the effects of corporate governance and auditing are, the more the asymmetric information problem between the investor and the enterpriser or the manager is solved, and it can solve the under-investment problem.
Keywords
Corporate Governance; Auditing; Management Type; Investment; Asymmetric Information