Audit Opinions, The Legal Protection Of Investors And Private Enterprises Debt Maturity Structure

Select the debt maturity structure of the debt is one of the most importantcorporate financing decisions, it relates to the efficiency of corporate debt financing,as well as their own financial security issues. Our financial system isbank-dominated China’s domestic capital markets and foreign capital markets havenot developed, underdeveloped corporate bond market, the enterprise is almostimpossible to obtain sufficient funds from external sources other than banks to meetcorporate demand for funds. Because of benefit differences and informationasymmetry between insider and exterior, the insiders will do harm to the creditors.So adverse choice and moral hazard will come into being during financing and sowill agency cost, which damages corporation values and reduce effectiveness of funduse. As one of outside investors, creditors’ benefits protection affects healthdevelopment of national economy. In China, there is also a phenomenon that creditorbenefits are damaged.If we protect creditor, we must improve gradually and enforce effective thelaw. In absence of law protection in China at present, alternative external protectionmechanism and creditor’self protection get more important. It is base for protectingcreditors to attain enough information. However, independent auditing expressesassuring opinions on enterprises’ inside financial information by different auditingopinions, As an independent third party audit opinions issued by auditors, and canplay on the corporate and financial information forensic audit, the role of investmentrisk warning, and make creditors acquire enough and reliable information. It is animportant system for protecting creditors.This paper makes use of normal and positive methods to analyze the effect ofdifferent enterprise types, law environment and auditing opinions on liability term,based on information asymmetry theory, incomplete contract theory and transactioncost theory. And also indicates positively different effect of auditing opinions on liability term under different law environment.This paper bases research background on Chinese special system environmentand positively deals with China A-share listed companies’ data from2009-2011. Andit examines the effect of auditing opinions on liability term under different lawenvironment.This paper concludes as follows:(1) after controlling other related factors, wefind that there a significant positive relation between auditing opinions and liabilityterm. Good auditing opinions have more strong effect on original private enterprisesthan on private enterprises from state–owned enterprises.(2)Accompanied with thelevel of investor law protection, liability term is shorter. Compared to privateenterprises from state–owned enterprises, investor law protection has moresignificant effect on liability term among original private enterprises.(3) under thesame conditions, in the low level of investor law protection areas, good auditingopinions have weaker effect on private enterprises from state–owned enterprises thanon original private enterprises; and in the high level of investor law protection areas,good auditing opinions have no significant effect on liability term.