The Study Of The Effects Of The Monetary Policy And The Audit Quality On The Trade Credit Financing Cost

In recent years, as a supplement of the bank loans and corporate bonds, trade credit financing reached a large scale in our country.According to the GRA database from 2007 to 2013, the usage scale of trade credit in non-financial companies in our country had been more than 1/3 of the total debt account in the most of the years. As an important alternative way of bank credit financing, optimizing the trade credit financing should be reckoned seriously, and how to reduce this kind of trade credit financing costs becomes the core issue of this article.In the process of transactions with upstream suppliers, whether it is a normal procurement relationship, or the using of trade credit for alternative financing, trading partners always have demands for robust and reliable accounting information. As a kind of external supervision mechanism,independent auditing has the supervision function, which is usually regarded as a function of external governance for companies.Audit quality can play a role of signal transmission,through improving the quality of supplier’s trust to the company’s accounting information,thus reduce the information asymmetry between the interest subjects,and improve credit rating so that enterprises can get more low-cost credit rationing.However, trade credit financing is susceptible to the effects of macroeconomic policy, especially monetary policy. In the existing studies, scholars more focused on the influence on business financing costs of the explicit auditing opinions and implicit audit quality, but pay less attention to comprehensively consider the effect of external macro factors.The value target of monetary policy which is established by the government will follow the actual economic situation and adjust constantly.That is to say,monetary policy changes frequently and has a big uncertainty.For the micro companies, the change of the monetary policy is a exogenous event that the enterprise can’t change.Therefore, under the background of monetary policy,studying the effect of audit quality on the trade credit financing costs is more prominent practical significance without doubt.This article try to start from the perspective of monetary policy changes, base on information asymmetry, the monetary policy transmission mechanism theory system and the signal transmission theory, and integrate use the empirical research method and research method to make research that audit quality’s influence on trade credit financing costs, then deepen the signal transmission function of audit information.At last,I offer some advises from the perspective of monetary policy of macro and micro level of creditor protection respectively to decrease the cost of the trade credit financing.The suggestions are proposed for government departments to formulate laws and regulations and make full use of audit information signal transmission function and provide referential suggestions to the enterprise and stakeholders who make right decisions.Based on the above research contents, this paper proposes three hypotheses with carrying on the empirical analysis. The article structure arrangement is as follows:The first part is the introduction of the paper. This part mainly aims at introducing some basic problems of this paper, including the motivation of research selection and research significance, and the choroid of research, the article structure arrangement and the research methods.The second part is the literature review, this paper summarizes the existing literature from three sides:the trade credit financing, audit quality and monetary policy. This part is to research the trade credit financing as the main line, based on the influence of trade credit financing from independent auditing and monetary policy,summarizes the related literature both at home and abroad.The third part is the theoretical analysis, this chapter elaborated the information asymmetry theory, the monetary policy transmission mechanism and signal transmission theory and lay a solid theoretical foundation for the research.The fourth part is the research hypotheses and research design, theoretical hypotheses part based on the information asymmetry theory, the monetary policy transmission mechanism and signal transmission theory deduction and puts forward the research hypothesis.This part also discussed the research model in study design, the source of the sample data and drawing and selection and defined of the selected variables in detail.The fifth part is mainly about the empirical test and the result analysis, regression model results and its analysis.This part also confirmed the presumption of audit quality for trade credit financing costs and the different period of monetary policy’s effects of audit quality on trade credit financing costs vary.The sixth part is divided into research conclusion and the enlightenment and summarizes the research results.This part pointed out that the study limitations and discussed the development direction of future research.This paper mainly draws the following conclusion:First, high audit quality can reduce enterprise’s trade credit financing costs. Second, compared with the period of monetary easing, trade credit financing costs in monetary tightening period are much higher. Third, in the monetary policy in different periods, audit quality has differences on the influence of the trade credit financing costs.Compared with the monetary easing period, audit quality in the monetary tightening period had more negative impact on the trade credit financing costs.The innovation of this article mainly focused on two points.Firstly,this paper verified the audit quality has information content to trade credit creditors by investigating suppliers trade credit, such as whether creditors will react to audit quality and reaction dynamics. Second, this paper extended the relationship between the macroeconomic environment and micro-economic individual interactions, enriched the research of the trade credit financing costs from the perspective of monetary policy and found that the monetary policy affected he influnece of audit quality on the trade credit costs.