Abstract: The current auditing standards require auditors to pay attention to the external environment where customers are located and identify the resulting engagement risks. As an important part of the external institutional environment of micro enterprises, a cordial and clean government-business relationship will affect the production and operation activities of private enterprises, which will affect the auditor’s risk perception and further affect the auditor’s decision-making. Taking the A-share private listed companies in China from 2017 to 2019 as the research samples, this paper examines the impact of a cordial and clean government-business relationship on auditors’ decision-making. The results show that a cordial and clean government-business relationship can reduce the business risks and audit risks perceived by auditors, thereby reducing auditors’ auditing fees and the tendency to issue non-standard audit opinions. The influence of a cordial and clean government-business relationship on auditors’auditing fees and audit opinions is more obvious in enterprises with higher industry competition and less negative media reports.

Key words: acordial and clean government-business relationship, private enterprise, auditing fees, audit opinion