A Study On Auditor Reputation、Seasoned Equity Offering And Capital Allocation Efficiency

Market shows a low efficiency in allocating security capital in recent years,therefore，how to improve the efficiency of SEO is important to the capital markets’long-term and healthy development in the condition of relatively limited economicresources available in the capital market. This paper analyzes the relationship betweenthe auditor’s reputations with capital allocation efficiency from the perspective ofSEO regulators authority.The paper study whether the auditor’s reputation have an effect to regulators ’decisions based on the data of2007-2010refinancing plans of listed companies,further study include relationship between efficiency of capital allocation withfinancing approved,auditor reputation with capital allocation efficiency,auditorreputation with efficiency of capital allocation under the respect whether financinggranted or not. The results show that: Auditor reputation has significant impact on thefinancing decision that is companies under high auditor reputation have easier accessto equity financing. Listed companies under higher reputation auditors have higherfinancial capital use efficiency and better long-term results of operations under thefinancing are approved condition. However, without considering the auditor’sreputation, finance approved or not has no effect on capital allocation efficiency andthere are no different in statistically on long-term business results for the next threeyears. This paper studies suggest that the auditor reputation in the capital market canbe able to recognize the value of equity refinancing and provide reference signals toguide the rational flow of financial resources. On the other hand, auditor’s reputationfor equity capital configuration effect is obvious, but the regulators ’ approvalauthority‘s effect on the allocation of capital is not significant. Therefore, in China’scapital markets, the relevant regulatory agencies should further improve theregulatory ideas, promotes the issuance of securities market reform, decentralization,so that market be a decisive force in the allocation of resources.