The Relationship Between Non-standard Audit Opinions And Corporate Debt Financing

In recent years,the demand for social financing has been increasing.According to the relevant information released by the National Bureau of Statistics on February 28,2020,we know that the scale of social financing in 2019 is 25.6 trillion yuan,comparing to equity financing,Debt financing not only does not require complicated approval procedures and it can prevent diluting the control of the enterprise,but also it can form a tax shield.Therefore,the main external financing method for general enterprises is debt financing.The audit opinion is the final result of the auditor 's independent audit,and the audit opinion contains a lot of useful information.For other users of financial statements,it can serve as a “signal light” for transmitting information.This "signal light" can often inform the information about the operating status of the audited enterprise,the level of solvency,or the risk of breach of contract by the enterprise for the users of information.Therefore,there is an increasing number of creditors or investors who are highly concerned about the audit opinions issued by enterprises.From 2013 to 2017,the number of companies which are issued non-standard audit opinions has increased year by year.The problem studied in this article is how non-standard audit opinions affect corporate debt financing.At present,most scholars are studying the market response of non-standard audit opinions and the impact on equity financing from the perspective of the securities market and investors.However,there are few studies on the correlation between non-standard audit opinions and debt financing and the research dimensions are not comprehensive enough,which shows that there is still some research space for the impact of non-standard audit opinions on debt financing.The research ideas of this paper can be summarized as follows: from this perspective of non-standard audit opinions,the detailed case analysis is carried out with Dongfang Zirconium as a specific case company,and with the help of signal transmission theory,principal-agent theory and information asymmetry theory The analysis of the standard audit opinion and corporate debt financing is combined.This article uses the event research method to select Dongfang Zirconium Company,which has a more obvious market response,as the main body of the case study.From the method of debt financing(Bank credit,bond financing,commercial credit financing),the amount of debt financing,the duration of debt financing,and the cost of debt financing,to further explore the impact of non-standard audit opinions on corporate debt financing,and from three theoretical perspectives explain the theoretical reasons for the impact.This article starts from a typical company and it uses annual,quarterly and industry data to conduct research,finaly it finds that: after Dongfang Zirconium was issued a non-standard audit opinion,its debt financing amount was reduced,the short-term debt financing ratio increased,and debt financing costs increased.The conclusions,combined with the above conclusions,this paper puts forward a few suggestions.The research value and enlightenment significance of this article: An important part of business management is financing to meet the needs of sustainable business development.Dongfang Zirconium Company is a representative enterprise in the manufacturing of non-ferrous metal products.Non-standard audit opinions can form a relatively significant negative market response.Analysing and studying this case can produce far-reaching practical and theoretical significance.It not only can serve as a reference to prove the relationship between corporate debt financing and non-standard audit opinions,but it also provide a reference for how to reduce the risk of corporate financing.