Empirical Research On The Accounting Robustness To The Influence Of The Capital Cost Of Debt

Accounting conservatism also known as prudence, is one of the basic principles and practice for enterprises in our country. The application of accounting robustness can be traced back to the15th century in Europe, and have had much influence on many countries’accounting theory and practice, but the systematic and in-depth studies are things of the past two decades. The study of robustness overseas has a long history, and the theory is mature, while it develops more slowly in our country. Nowadays, most domestic literature focused on the study of the cause, measurement and factors of influence of robustness except the economic consequences due to the differences of economy characteristics between china and abroad.The scale of bond and stock market of our country is relatively small and developed immaturely so that making loans to Banks is still the main way of debt financing. In china, equity financing of enterprises accounted for the proportion of the total or junk-rated basically is about6%, while the proportion for bond is only about2%. Therefore, more than90%money of the enterprise is from bank loans, so that cost of most enterprise debt is decided by the bank loan interest. However, because of the asymmetry of the presence of information, the obligor may be to hide the real information of the fraud, the creditor may be also for the purpose of hedging risks to do adverse selection behavior, this will lead to the situation that resources can’t be configured well. However accounting conservatism not only can reduce the moral hazard and adverse selection of contract parties caused by information asymmetry, based on the improvement of information quality, But also from the point of view of corporate governance, the inhibition of the alternative of corporate assets, to further protect the interests of creditors, so creditors have requirements of high quality accounting information. On the other hand, when creditors are aware of the soundness of the debtor accounting information, they will give the debtor preferential, and this will promote the signing of debt covenants. So the study of influence on the cost of debt from robustness has important theoretical and practical value.This article first summarizes the related research status at home and abroad about the soundness of the concept, measurement methods, causes and economic consequences; Second, drawing on the basis of the results of previous studies, divided the cost of debt into the recessive costs and explicit costs, and the normative analysis method for robustness to the cost of debt the influence of the theory analysis and put forward a hypothesis; Finally, adopt the empirical method to test hypotheses. Select the2009-2011A-share listed companies data, while mainly adopts MTB method and Basu model two kinds of method of measurement, to measure the independent variables, regression models, then establish the regression model, do the empirical analysis, to obtain a more comprehensive and accurate results.The empirical result shows that:in the control of the related factors, the higher the accounting conservatism, the dominant debt cost is lower; one enterprise’ accounting conservatism is high, it is more likely to get new loan; one enterprise’ accounting conservatism is high; it is more likely to achieve long-term debt financing.