Auditor Quality And Debt Maturity Structure Of Listing Corporation

The high quality of the external audit can significantly improve the quality of financial information of companies, and it has important impact on the creditors as one of the main users of accounting information. To explore the effect of external audit of enterprise debt financing is one of the most popular research topic in recent years in the financial, accounting and auditing field. Although there are scholars to explore to audit opinions, but the research on auditor quality is not comprehensive. On the one hand, compared with foreign countries, domestic researches on the effects of external audit of the debt contract literature has focused on debt financing constraint and debt financing cost. To explore the influence of the external audit of the debt maturity structure of literature is still relatively small. The scholars emphasize more on the test of audit opinion which is able to play a signaling function to strengthen the protection of the creditors, and the conclusion is also quite consistent. The impact of quality of auditors (auditor industry expertise and auditor reputation) on debt maturity structure scholarly appears to be controversial. Conclusions of the study are not completely consistent, some of which are even opposite with the theory and the reality of cognitive. So it shows that the problems have further discussed room. On the other hand, most of the existing domestic literatures are just direct tests of the impact of external audit on the debt maturity structure, and very few consider the sample selection auditor self selection which caused the literature bias. Based on the above consideration, this paper uses the data of A-share listed companies from 2007 to 2013 with propensity score matching (PSM) to overcome the sample selection bias, and then examines the effect of auditor quality on debt maturity structure. This topic to understand the protective effect of external audit on the creditor has important significance.This study found that:(1) Auditor quality has significantly negative correlation with debt financing. With the use of propensity score matching method in solving the problem of self selection of auditors, so is the conclusion. High quality auditors will reduce the corporate debt maturity. Therefore, the external audit is important as the company’s external supervision mechanism and helps to reduce the degree of information asymmetry of firm, which has a correlation between the financing behavior and company. Although high quality auditors can enhance the transparency of accounting information and reduce the degree of information asymmetry between banks, they are likely to disclose the unfavorable information. And creditors may shrink corporate borrowing or shorten the business loan period. The overall empirical results support disclosure restricted hypothesis. (2)Further study showed that the nature of property rights, corporate auditor quality information environment, and the degree of marketization of local company have influence on debt maturity. In the areas of high degree marketization, non state owned enterprises, and high degree of information asymmetry in the company, there is a significant influence between auditor quality and debt maturity. And in the areas of low degree marketization, state-owned enterprise and less information asymmetry in the company, the audit is not significant.This paper empirically tests the effect of auditor quality on debt maturity structure. The research not only enriches the existing literature on debt maturity structure factors, but also for the external audit, especially provides the basis for the role of high audit quality on enterprise financing etc..