Research On The Influence Of Accounting Conservatism To The Debt Costs In China's Listed Corporations

The development of enterprise requires funds for supporting.In order to obtain sufficient funds,Enterprises not only draw support from internal financing,but also requires a lot of external financing.Debt financing is a main external financing,which has become an important economic activity.The debt capital cost has become the focus of corporate in debt financing.As the existence of information asymmetry and moral hazard,there are conflicts in the debt contract among stakeholders.In order to protect interests,creditors need to use accounting information to analyze the financing of enterprise financial capability to make reasonable decision and to reduce the investment risk.Therefore,the accounting information quality will directly affect the enterprise's financing costs.Studies have found that accounting conservatism can alleviate conflicts between shareholders and creditor,strengthen the credit decision usefulness of accounting information and affect the cost of debt capital in a certain extent.This article studies the influence of accounting conservatism on the debt cost of our country's listing Corporation.It provides a certain theoretical basis for making debt financing decision,choosing accounting policy and protection of creditors.Based on the review of domestic and foreign research status,this article makes use of the previous empirical data to study the influence of accounting conservatism on the cost of debt capital.Choice all A listing Corporation in our country as a sample,using panel data to empirically study the relationship between accounting conservatism and the cost of debt capital.Accrual-cash flow and negative cumulative accrual are adopted to measure the conservatism and test of the applicability of measurement methods of accounting conservatism.The result shows that the non-operating accrual items are more applicability than the other attributes of the accrued items;negative cumulative accrual also has the applicability in our country.In order to make the results more convincing and reliable,the applicable measurement method is chosen to make an empirical analysis about the relationship between accounting conservatism and the cost of debt capital respectively.The final results of the regression analysis show that the higher the degree of accounting conservatism,the lower the cost of debt capital and the research conclusion is consistent with foreign countries.