The Research On The Influence Of Informatio Disclosure Of Real Estate Enterprise’s Internal Control On Debt Contract

Internal control is a kind of activities and mechanisms which ensure the healthy operation of company. It is very important for the prevention and control of the financial risks, and also it is significant for the protection of investors. The information asymmetry between the companies and the creditors may cause adverse selection or moral problems. For a company, if the quality of information disclosure of internal control is low, reflecting the quality of the internal control is low, which may influence the accuracy of the accounting information. Then the creditor may require higher loan interest rate and shorter loan period to make up for the higher risk cost. Moreover, compared with the companies with bad internal control system, the companies which have a good internal control system will deliver a positive message to the creditors, so they could get lower debit cost and more loans.The article mainly uses empirical analysis method and the standard methodology. The thesis firstly summarizes the domestic and overseas research result and theoretical framework. Then choose the listed companies belonging to the real estate industry as the research objects, choose the internal control data of 2012&2013 and get the ICIDI through the evaluation system. Take the ICIDI as the explanatory variable. The article also takes the debt data of 2013&2014 as explained variable. Furthermore, control the other variables such as the scales of the enterprise, nature of property right, asset-liability ratio, ratio of fixed assets. Under these conditions, the article analyzes the influence that the information disclosure of internal control has on the debt contract. The article also compares the influence that the information disclosure of internal control has on the debt contract under different nature of property right. Because of the political background for the state-owned company, these state-owned companies have implicit government guarantees and soft budget constraint, so they have the advantages in terms of getting the loans from bank. In other words, Information disclosure of internal control is more important for private enteiprises compared with those state-owned companies.Finally, due to the result of analysis, we suggest that the listed companies should strengthen the internal control system and improve the quality of the information disclosure of internal control. On the other hand, the government regulatory should improve the regulatory system of information disclosure of internal control and pay more attention to the supervision. At the same time, the government should promote the market-oriented reform and make the private enterprise and state-owned companies enjoy the same treatment in terms of credit and loan, thus making market can operate safely and efficiently.