A Study On The Impact Of Accounting Robustness On Debt Cost

For listed companies, the financing channel mainly divided into equity financing and debt financing. For listed companies in China, The main source of financing is debt financing, a few comes from equity financing, therefore, the cost of debt become one of the key factors that affect the financing efficiency, further influence the growth of the company and the outstanding achievement, there is a conflict of interest between shareholders and creditors, The accounting conservatism of contract play a role, to reduce the cost of agency, to reduce the moral hazard and opportunistic behavior between shareholders and creditors which due to information asymmetry, to alleviate the conflicts of interest, thus providing the guarantee of effective implementation to the debt contract, to make the cost of debt lower, to improve the company’s overall value. This paper mainly studied under the environment of our capital market, the purpose is to discuss the accounting conservatism will have any impact on the cost of debt, hope to find effective methods to reduce the cost of debt that for the enterprise is helpful, also can provide the basis reasonably and effectively which contribute to formulating the national accounting standards and help the enterprise select accounting policy reasonably.This paper reviews the theoretical concepts about accounting conservatism and debt costs, study and recital the existing literature, this paper deeply research the theoretical basis between accounting conservatism and debt costs, selecting the public company on the stock markets of Shanghai and Shenzhen2011-2013as the research sample, Using SPSS17.0as statistical software, through establish a reasonable measurement model to empirical analysis how accounting conservatism affects the cost of debt. Using the ratio of (finance cost/debt with interest) as substitution variables for the annual debt costs, in method of non-operating accrued items to calculate data as substitution variable for the accounting conservatism, and choose the debt structure, asset-liability ratio, growth and equity multiplier, the multiple of interest safeguard, loan proportion, the cost of debt as control variable, analysis of regression was used to study the accounting conservatism influence on the debt of cost, the empirical analysis conclusion is:the accounting conservatism is negatively correlated with the cost of debt, with the higher robustness the enterprise will have the lower debts of cost.