Internal Control Over Quality,Financial Restatements And Debt Financing Costs

In the fierce market competition,companies need sufficient capital flow in order to seize the market and achieve sustainable development.At this time,debt financing such as bank borrowing and bond issuance is an effective and time-consuming solution.However,in the current capital market,financial restatement happens frequently,and investors will delay or cancel their investment because they doubt the authenticity of accounting information.The external information users,such as creditors because there is no direct participation in management,only by the company disclosed financial statements and other information to determine the comprehensive situation,but the financial restatement behavior suggests that previously disclosed accounting information of listed companies is not real,there are errors,it will weaken the creditors of the listed company investment confidence,lead to rising cost of debt financing.Internal control is one of the important systems to standardize the operation and management of a company.It can not only improve the credibility of financial information,but also protect the interests of fund providers.Strengthen internal control construction,encourage the company to take the initiative to disclose true and reliable data,reduce the negative impact of information asymmetry.This article through to the enterprise internal control quality,financial restatements and debt financing costs and other related research literature,on the principal-agent theory,the optimal sequence financing theory,asymmetric information theory and risk assessment based on the theory of four using China's Shanghai and shenzhen a-share listed company data from 2013 to 2017 as samples to make A study of the three relations research whether financial restatement of quality control for the enterprise internal factors influencing the debt financing cost of mediation,further according to the occurrence of financial restatements is classified,research the role of the different categories of financial restatement,and put forward the corresponding assumptions.The results show that:(1)the quality of internal control is negatively correlated with the cost of debt financing;(2)internal control quality is significantly negatively correlated with financial restatement,and this negative correlation is more significant in non-state-owned enterprises;Compared with technical financial restatemeny,high quality internal control can restrain economic financial restatement more effectively.(3)economic and financial restatement plays an intermediary role in the way that the quality of internal control affects the cost of debt financing.Based on the above conclusions,this paper proposes relevant countermeasures and Suggestions on how to improve the quality of internal control and reduce the probability of financial restatement,so as to provide a decision reference for the listed companies to reduce the cost of debt financing.