摘要
In China, an emerging economy, where investor protection is relatively weak, it is worthwhile and interesting to investigate whether independent external auditing, a sort of external corporate governance mechanism, exerts its influence. Using a sample of all A-share listed firms in 2005, this paper investigates the effects of independent external auditing on corporate governance via three aspects： （1） choice of auditing institution; （2） auditing fee; and （3） auditing opinion for annual reports. Empirical results show that, with worse agency problems in firms, the possibility of employing the “Big 41” to audit its annual reports is bigger. When determining auditing fees, auditing institutions take both firms＇ agency problems and the firm size into account. When issuing qualified opinions for poor-performing firms, auditors do not consider agency problems embedded in concentrated ownership. Overall, external independent auditing plays a limited role in corporate governance.
