Study On The Influence Of Market Competition And Audit Opinions On The Cost Of Debt Financing

Debt financing is the key factor restricting the development of enterprises in China,in 2016,Chuanhuagufenwas insolvent andwas applied by creditors for reorganization,many such events cast a shadow over the financing market.In our country,debt instruments are the most widely used financing tools.Compared with equity financing,Chinese enterprises prefer debt financing.Corporate debt financing has two ways: private placement and issuing public bonds.Compared with foreign countries,China’s bond market is underdeveloped,and debt financing is mainly based on bank loans.The cost of debt financing directly reflects the cost of obtaining the debt funds of the enterprise,and indirectly reflects the difficulty of its debt financing.The interest rate of the enterprise is not only reflected the company’s financing and profit ability,but also closely related to the survival,development and expansion of the company.How to effectively reduce the cost of enterprise debt financing and help enterprises to get out of the financing difficulties has become a difficult problem to be solved in the economic development of our country.External creditors obtain information mainly through financial reports to evaluate the development and solvency of the enterprise.CPA audit is independent of enterprises,creditors and investors.It can objectively and fairly evaluate the financial status,business results and cash flows of enterprises.It is a mechanism of certification and supervision.Audit opinion is the crystallization of audit work.It can ease information asymmetry between borrowers and creditors,reduce the disadvantage of external creditors in information and reduce the cost of debt financing.The degree of market competition in this paper refers to the degree of competition in the industry.It refers to the competition among the same industry in the same industry in terms of production,marketing and profitability.With the rapid development of economy,more and more enterprises in China are facing severe competition.When creditors make loan decisions and sign loan contracts,they will pay more attention to the important factor of debtor’s market competition.Facing different enterprises with different market competition,different stakeholders may have different judgments and understanding of similar audit reports and even identical audit opinions,and take different actions.Through the review of debt financing cost,audit opinion,market competition and other related documents,in the principal-agent theory,asymmetric information theory,incomplete contract theory and pecking order theory,this paper takes 2011-2016 years in Shanghai and Shenzhen A shares of listed companies as a sample,an empirical study of the degree of market competition,the audit opinion effect on debt financing cost of the relationship.The study found that: compared to the non standard audit opinion,standard unreserved audit opinion can significantly reduce the cost of debt financing of listed companies;the increase in the degree of competition in the market will raise the debt financing cost and at the same time,the pricing function of the effect of audit opinion on the cost of debt financingcan be strengthen.That is standard unreserved audit opinion will significantly reduce the costs of debt financing,while the unqualified opinions will significantly increase the cost of debt financing of enterprises.According to the research conclusion,this paper puts forward some countermeasures and suggestions to reduce debt financing cost,make full use of market competition and audit opinion to optimize the allocation efficiency of credit resources.