Research On The Relationships Between Corporate Governance, Audit Opinion And The Debt Cost Of The Private Listed Companies

In recent years, the private economy has become the most active part of the economy in China, the number of private listed companies are increasing continuously; and their size is also expanding. The debt levels are generally higher in private companies, coupled with external creditors aren’t involved in the management of daily operations, so there will be some constraints in financing. Creditors make decisions depend only on observed financial, non-financial data and an audit opinion issued by auditors. The article examines audit opinion issued by the outside independent department and internal corporate governance can or can’t affect the debt financing costs in the private listed companies. First, summarize the relevant literatures, then refer two basic theories:asymmetric information theory, agency cost theory associated with debt covenants. Then, on the basis of theoretical, analysis the related theoretical concepts of corporate governance, audit opinions, the cost of debt and the relationship between them, after the theory put forward relevant research hypothesis. Finally use STATA software to present the correlation, multiple linear analysis, regression empirical study to test the hypothesis.We research whether the external audit opinion and internal corporate governance affect the cost of debt, how they affect. By studying we find the following conclusions:Firstly, the audit opinion has information content, auditors’ opinion has a significant positive correlation with the cost of debt. That is, if private listed companies are issued non-standard audit opinions last year, the cost of debt will be significantly larger. Secondly, there is a significant negative correlation between the ratio of the largest shareholder and the cost of debt, a significant negative correlation between the proportion of independent directors agency and costs of debt in private listed companies, a negative correlation between the number of board meeting held in one year and the cost of debt capital. So the higher proportion of the largest shareholder, the higher the proportion of independent director in a board of directors, more frequent of board meetings in the fiscal year, the lower cost of debt in the private listed companies. Thirdly, the number of members of the board of directors and the company was positively correlated with the cost of debt in private listed companies, but not significantly.