Research On The Influence Of Government Accounting Supervision On Enterprise Financing Cost

The fourth plenary session of the 19 th Central Commission for Discipline Inspection elevated accounting supervision to the level of national governance,highlighting the important position of accounting supervision in the Party and national supervision system.In the context of requiring the coordination and coherence of financial and accounting supervision with other supervision and the formation of a permanent and long-lasting supervisory synergy,it is important to deeply evaluate the effectiveness of China’s government accounting supervision.At the same time,information risk theory shows that in market economic activities,different people have different grasp of relevant information,that is,information is asymmetric,and the information risk brought by this difference is difficult to disperse.This can bring about the behavior of adverse selection by investors,i.e.,protecting their rights and interests with a higher price of funds in the case of low information transparency,which means that the cost of corporate financing is raised for enterprises.As the visible hand in the market,it is of research value and research significance whether the government can improve the quality of accounting information in market economic activities and alleviate information asymmetry through the mandatory supervision behavior of government accounting supervision,thus reducing the financing cost of enterprises.Among the many supervisory mechanisms to prevent and supervise the distortion of accounting information of listed companies,the Ministry of Finance’s accounting information quality inspection greatly alleviates the endogeneity problem because of its unique compulsory advantage,providing unique evidence of Chinese institutional background to study the economic consequences of governmental accounting supervision.The Ministry of Finance(MOF)accounting information quality inspection,which has lasted since 1999 to the present,is the important instrument of government accounting supervision.This paper manually extracts the data of problematic enterprises disclosed by the Ministry of Finance’s accounting information quality inspection announcements from1999 to 2019,and empirically investigates the impact of government accounting supervision on enterprises’ financing costs based on the quasi-natural experiment of the Ministry of Finance’s accounting information quality inspection system of "double random,one public".The following conclusions are drawn:(1)The financing cost is significantly reduced for the enterprises that are subjected to the Ministry of Finance’s accounting information quality inspection and public disclosure,and there is a lag in this effect,which has a certain dynamic effect.(2)The heterogeneity analysis shows that the impact of government accounting supervision on the reduction of financing cost is more significant in non-state enterprises and small and medium-sized enterprises.(3)Through mechanism analysis,government accounting oversight reduces corporate financing costs by improving accounting transparency and prompting firms to improve internal controls.The main innovations of this paper are:(1)Enriched the study of the economic consequences of governmental accounting supervision.The existing studies on the quality inspection of accounting information by the Ministry of Finance focus on specific operations,but this paper analyzes the effect of government accounting supervision on the level of corporate financing costs,focusing on the economic consequences of the implementation of this accounting supervision act.(2)Enriches the research on the factors influencing the cost of enterprise financing.Taking the quality inspection of accounting information by the Ministry of Finance as the entry point,this paper discusses the influencing factors of enterprise financing cost from the perspective of government accounting supervision.(3)Enriched the research on the impact path of government accounting supervision on enterprise financing.Information transparency and internal control are introduced to test the influence mechanism,which is verified by empirical methods to provide empirical evidence for government accounting supervision to strengthen supervision and promote the healthy development of capital market according to law.