Abstract:In 2018, the establishment of audit committee of the Party committee created an exogenous change in audit independence. Taking this reform as a quasi-natural experiment, this paper employs an intensity DID model to examine how stronger audit independence affects the regional business environment. The results show that stronger audit independence significantly improves the regional business environment, and this finding remains robust across a series of tests. Mechanism analysis suggests that, through the internal government channel, stronger audit independence helps improve the business environment by easing fiscal pressures associated with weakened fiscal discipline; through the external market channel, it enhances economic resilience by optimizing policy supply and safeguarding market fairness, which in turn contributes to a better business environment. The positive effect is more pronounced in western China. In addition, public data openness significantly shapes the governance effect of audit independence. In regions with lower levels of data openness, stronger audit independence significantly improves the business environment. In regions with higher levels of data openness, however, the positive effect does not appear and some negative influence emerges, which may be related to a degree of blame-avoidance behavior by local governments under overlapping supervisory pressures. The research findings not only expand the theoretical boundaries of business environment optimization from the perspective of audit independence, but also provide empirical evidence and policy references for deepening audit management system reform, stimulating market vitality through supervisory effectiveness, and promoting high-quality regional development.