Property Rights, Social Audit And The Cost Of Debt Capital

The social audit has become the bridge of information between the creditors and debt, investors and entrepreneurs, banks and companies since the last century. Even though the company can get the capital directly from the capital market, it can’t meet the companies’ needs of capital because of the restrictions of the capital market. In addition to the limited development of China’s bond market, besides the interest of the debt can be deducted from the pre-tax income of the enterprise, which is often called the interest tax. In China, the debt financing is one of the most important financing channels of companies. How to build the information bridge was essential to the health development of the audit industry, and this is a very meaningful problem. If the company wants to get more loans and lower the cost of debt, it must ensure the objectivity and credibility of the financial information about themselves. Creditors must take measures to protect their own interests, and the creditors need to obtain objective and true financial information, so that creditors would require the independent third party as an information bridge, and this is the social audit. Social audit has the function of information transmission in the loan contract. Could the objective and true information change the debts and capital cost of the enterprise?There are too much research on the audit opinion, but for the topicality study of the auditor type and business lending decisions are also very little. Because of the listed company’s audit report which is issued by non-standard audit opinion is little; this paper selected the social audit institutions type as explanatory variable. Researching the audit opinion and the debt capital cost also does not have too much theoretical and practical significance. The type of social audit institutions under different property rights have less impact on the debt capital cost, so the influence of the purpose of this article is to fill the theoretical defects in several aspects.Based on the A share companies listed in Shenzhen stock exchange between 2008 and 2012 as samples, and using the method of descriptive statistical analysis,multivariate correlation analysis, multiple regression analysis, robustness test to analyze the auditor type and property rights’ influence on debt capital cost. Thenverifying the auditors’ type under different property rights impacts on the cost of debt capital.The results confirmed that the social auditor type have a negative correlation relationship with the cost of debts capital for the enterprise. After controlling the loan term structure, total assets net profit margin, cash ratio, revenue growth, total assets turnover ratio, long-term capital ratio, firm size, sheet and so on, the social auditor type have a negative correlation with the cost of debts capital for the enterprise. In other words, if the social auditors’ type is the Big Four, the enterprise can obtain a lower cost of debt capital. At the same time, we investigate social audit’s effect on the cost of debt capital under different property rights.