Auditing Bodies Characteristics, Corporate Information Transparency And Loan Race

Since the beginning of the last century, the creditor and debtor has attached great importance to the independent audit. But in recent years, a large number of audit scandal challenges the status of the independent audit, people have given a high priority to this.In addition, although the company can be financed through capital market, bank loans still account for the dominant position. Therefore, the scientific understanding of the role of independent audit in the loan contract in the debt market has important significance. Currently, we already know that the independent audit in bank loans contract has a certain role in the transmission of information, then if the function will be affected when the enterprise information environment changes. Whether the improvement of enterprise information transparency will bring lower loan race? Overall, there are a lot of research on the auditor size, but also less thematic study of the auditor size and bank lending policies. Also, there are few studies of audit tenure, information transparency and the loan race.Therefore, this paper analyzed the relationships between Auditing bodies Characteristics, corporate information transparency and corporate loan race.In the empirical analysis, we find that the auditor size and audit tenure are negatively related to the corporate loan race. As the paper shows, the "big ten" accounting firm helps enterprise strive for a more favorable loan race. Also, the longer the audit tenure is, the lower the loan race.After a further analysis on the characteristics of the auditor, I found that the function of the audit tenure on the loan race will be affected by the auditor size. When the auditor size is the "Top Ten", the audit tenure has a relatively weak positive impact on loan race. The longer the tenure is, the higher the loan race.In order to further investigate the relationship of the Auditing bodies Characteristics (including the auditor size and audit tenure) and the company’s loan race under different information condition. According to the information transparency, the sample is divided into two subsamples. As the regression results of two sub samples show, when the enterprise’s own information transparency is good, the auditor size and audit tenure have a significant negative impact on loan race. While in low information transparency, this inverse relationship is not significant, this indicates that the Auditing bodies Characteristics will work only in a certain transparency.In summary, although the transparency of corporate information does not directly affect the loan race, but it can affect the effect of the Auditing bodies Characteristics and audit opinions on the corporate loan race.The contributions are as the following:(1) The paper studies the relationship between Auditing bodies Characteristics(auditor size and audit tenure) and loan race, fills the theory of the relationship between the audit tenure and loan race.(2) This paper is based on the changed enterprise information environment, enriches the theory on information transparency and bank loan race.Because of the limitation of time and author’s research level, this paper also exist the following deficiencies.In the first, there were some problems in selecting the control variable. This paper selected the audit opinion, the size of the company, asset turnover, asset-liability ratio, the level of profitability of the company, the company’s growth and corporate bankruptcy index to reduce the impact of other factors on corporate loan race. But these are far from enough, actually there are many other elements that influence enterprise loan interest, such as The big shareholders, other external financing, the company listed years, financial market, legal environment and so on. Therefore, if there were more control Variables, the empirical results of this paper could be more significant.Secondly, the article used the firm tenure as audit tenure, but not the auditor’s tenure. If we can study the two terms and compare the result, the conclusion will be more comprehensive and credible.In addition, in the sample selection and data sources. The samples is come from the A-shares of the Shenzhen Stock Exchange from2006to2010, not all listed companies. Otherwise, these samples need to meet the following conditions: Disclosures annual financial report; Disclosures the information of Audit Services; Non-ST company; Disclosures corporate information disclosure level. Thus, after the screening process, the sample size was small, especially the size of samples which were in low information transparency is only604. Therefore, the empirical result may not be accurate. If there were a richer sample data, and the difference between the two types of information transparency level, the findings may be more accurate.