Abstract:Non-state blockholders, as strategic investors, may exert governance effect, thereby affecting the choice of auditors of state enterprises. Using the sample of Chinese A-share SOE firms from 1999 to 2016, this paper empirically tests the effect of non-state blockholders on auditor selection. Results show that, non-state blockholders reduce the probability of state enterprises choosing local small auditors, which shows that they give full play to the effect of governance; the probability of selecting high-quality auditors increases with the relative power of non-state blockholders; in addition, the influence of non-state blockholders on auditor selection is more obvious in local enterprises and enterprises in the competitive industries. Further studies show that non-state blockholders improve the audit quality.