Abstract Taking the listed companies of Shanghai and Shenzhen A shares in China from 2008 to 2019 as samples, this paper studies the influence of corporate litigation risk on auditor selection. The study shows that litigation risk has the effect of inhibiting the selection of high-quality auditors. The intermediary effect test indicates that the enterprise litigation risk can reduce the risk probability of choosing high-quality auditors mainly by increasing agency costs and operating risks. The heterogeneity analysis shows that good corporate governance, internal control and external information environment can weaken the negative impact of litigation risk on auditor selection, while a better legal environment and the implementation of new audit standards strengthen this effect. The study enriches the literature on the economic consequences of corporate litigation risks and the influencing factors of auditor selection, and provides a reference for enterprises to choose auditors and auditors to deal with client litigation risks.
2021, Vol. 38 
