Institutional Environment,Audit Opinion And Long-term Bank Loan

The start of China’s bond market is late, and it develops slowly, compared with the stock market which is one of long-term capital markets, the development of the bond market is particularly inadequate, our country set many constraints to gauge the development of corporate bond which play significant financing role in company, it’s risk is higher than government bonds, and it is difficult to liquidate, because of those factors corporate bonds has been developing slowly. As a result, company mainly get through the bank borrowing to finance debt funds, long-term bank loan is the company’s main long-term debt financing channel, long-term borrowing has great strategic significance for the company. The bank interest rate marketization reform is underway currently, mortgage rates have get out of government control, deposit interest rate marketization process is accelerating. In this case, banks will put more emphasis on the dependability of information as the money supplier. So the creditors require independent third party to provide effective supervision. Bank borrowings is main debt financing channels in our country, to get more loans or more long-term bank loans, corporate must provide reliable information about themselves for banks. Previous studies have found that different opinions can pass different information to bank, thus affecting creditor’s decisions, embodied in that standard audit opinion will help companies gain more long-term bank loans than non-standard audit opinions. Moreover, bank credit decisions will inevitably influenced by its institutional environment. The long-term bank loan level of listed companies are not just determined it’s own characteristic, it may be closely related with Chinese unique institutional environment. Our country is on the stage of economic transition and social transformation currently, it accomplish great reform achievements at the same time, it also produce many contradictions, thus produce the special system environment, these institutional factors may be found in a certain extent, affect the company’s debt financing behavior. Finally, because all the government activities and market behavior is done under the institutional framework, they are produced in the institutional environment, so the relationship between bank long-term borrowing and audit opinions will be affected by the institutional environment.Based on the above analysis of background, this paper reviews the theory of asymmetric information, signaling theory, transaction cost theory and rent-seeking theory, summarizes domestic and abroad papers that are about the influence the audit opinion and institutional environment carried on long-term bank loan, puts forward that the nonstandard audit opinion will decrease the enterprise’s long-term bank loan, and this paper combines with the special system environment of listed companies in our country, deduces the financial market, the government management, legal system environment how to affect the company’s long-term bank loan, and the auditing opinions under different institutional environment how to change long-term bank loan.In empirical research, this paper selects 987 companies listed in Shanghai and Shenzhen stock markets in China from 2006 to 2012 as samples, at the same time eliminate the sample that are financial industry or missing, using SPSS19.0 statistical software, to research the influence the audit opinion and institutional environment carried on long-term bank loan. This article measure audit opinion through two types of audit opinions assignment, non-standard audit opinion assignment is 1,otherwise the value is 0.The study found that non-standard audit opinions can decrease the company’s long-term bank loan level, which shows that audit opinions affect bank credit decisions. This paper use Chinese enterprise management environment index data written by fan and Wang Xiaolu(2013) to build the company system environment index, this paper select three main index according to research request: financial marketization index, the government management level and the legal system level. Finally empirical study found that the system environment in the area of listed companies are significantly correlated with the company’s long-term bank loan level, namely when other condition is same, the higher financial marketization level, the lower the level of long-term bank loan; When other condition is same, the higher the government management level, the lower the level of long-term bank loan; When other condition is same, the higher legal system level, the lower the level of long-term bank loan. This article will also put audit opinion, the institutional environment, long-term bank lending into a research framework, the study found that under different system environment the effect audit opinion carried on long-term bank loan is different, the better institutional environment, the risk revealing function of audit opinion will weaken.