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Media Optimism and Audit Premium: Inhibition or Enhancement?

Xiangkun Yang, Lingjun Duan, Yanqing Lian


Based on positive media reports and the data of A-share listed companies from 2012 to 2021, this paper explores the influence of media optimism on audit premium. The empirical results show that media optimism can significantly increase audit premium, and this effect is more significant in profitable companies with high analyst attention. Further research shows that media optimism will drive the increase of investor sentiment, and investor sentiment plays an intermediary role in the relationship between media optimism and audit premium. It is found that the optimism of the media will not make auditors relax their "vigilance". On the contrary, the high exposure of the media and the upsurge of investor sentiment increase the litigation risk and extra investment of auditors, which is ultimately reflected in the increase of audit premium. The research conclusion provides an incremental explanation for the influencing factors of audit premium and has certain policy implications for how to better play the synergistic role between media and auditor.


Media Sentiment; Audit Premium; Investor Sentiment

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DOI: http://dx.doi.org/10.18686/fm.v8i2.8642