Research On The Impact Of Key Audit Matters On Debt Financing Cost

With the rapid economic development,the capital market provides strong support for the growth of enterprises.Since the 19th CPC National Congress,the CPC Central Committee has also stressed the need to promote the healthy and orderly operation of the capital market and constantly promote the innovation and development of enterprises.Capital is the power source of the enterprise,but relying only on internal capital may not be enough.When necessary,the enterprise will choose to obtain capital from the outside.As one of the main external financing methods of enterprises,debt financing is affected by factors such as information asymmetry and thus its cost is high.In order to solve this problem,the state has also gradually launched a series of "cost reduction" policies.In this context,it is urgent to study the influencing factors of debt financing cost.However,to completely solve the problem of debt financing cost,we must contact both internal and external aspects.The research on the impact of internal factors on debt financing cost has been very rich,but scholars pay less attention to external supervision than to internal governance.In particular,the introduction of the new auditing reporting standards,which require the addition of key audit matters,provides a new entry point for the study of the influencing factors of debt financing cost,but at present,there is little literature to study from this perspective.Therefore,this paper studies whether the information of key audit matters required by the new audit reporting standards has information content and can affect the credit decision-making behavior of creditors,thus affecting the debt financing cost of enterprises.On the basis of transmitting risk information of key audit matters,this paper studies the relationship between key audit matters and debt financing cost from two aspects;the number of key audit matters and the risk information content of key audit matters.In the mediation effect test,this paper verifies the mediating role of creditors’ risk perception.In further analysis,this paper verifies the regulatory role of internal control quality and analyst tracking in the relationship between key audit matters and debt financing cost,examines the impact of key audit matters such as asset impairment on debt financing cost,and verifies the differentiated impact of different types of key audit matters.In addition,this paper studies the impact of real earnings management on key audit matters from the perspective of antecedents.Taking 2016 A+H-share listed companies and all A-share listed companies from 2017 to 2020 as the initial samples,this paper draws the following conclusions through empirical research:Firstly,there is a significant positive correlation between the number of key audit matters and the cost of debt financing.There is a significant positive correlation between the risk information content of key audit matters and the cost of debt financing.Secondly,creditors’ risk perception plays a partial mediating role in the relationship between key audit matters and debt financing cost.Thirdly,internal control quality plays a negative regulatory role in the impact of key audit matters on debt financing cost.Fourthly,analyst tracking plays a negative regulatory role in the impact of key audit matters on debt financing cost.Fifthly,the greater the risk information content of the key audit matters of asset impairment,the higher the debt financing cost.Further distinguish the key audit matters of asset impairment and find that different types of matters will have different impacts.Sixthly,there is a significant positive correlation between the degree of real earnings management and the number of key audit matters;there is a significant positive correlation between the degree of real earnings management and the risk information content of key audit matters.Based on the above research conclusions,this paper also puts forward suggestions from the two aspects of listed companies and auditors.