Research on the Impact of Financing and Short selling System on Audit Quality

Abstract

The margin trading and securities lending system, as a new type of financial tool, has a significant impact on the Chinese capital market, affecting audit quality from the perspective of credit information disclosure. This article selects A-share listed companies in Shanghai and Shenzhen from 2007 to 2023 as samples and uses a double difference model to study the impact of margin trading and securities lending on audit quality. Research has found that after the implementation of the margin trading and securities lending system, the audit quality of margin trading and securities lending target enterprises has significantly improved compared to non-margin trading and securities lending target enterprises. Therefore, while improving the margin trading and securities lending system, we should leverage the combined efforts of internal control and audit supervision to improve audit quality.