Research On The Influence Of Internal Control Quality In Listed Companies On The Cost Of Debt Financing

Although China's financial market has made great development,there are still big differences compared with the developed countries.The demand for investment and financing is increasing,while the domestic financial market cannot satisfy the contradiction of different levels of financing needs.The debt financing is still one of the main ways of financing to alleviate the shortage of funds.The quality of internal control is an important decision-making reference information which is easy to be perceived by the debtor,which has great influence on the corporate debt contract.However,The frequent failure events of internal control at home and abroad have seriously hampered investors' enthusiasm.Since 2008,China has issued a series of documents,such as the “Basic Norms of Internal Control of Enterprises” and supporting guidelines.In 2016,the “Basic Norms of Internal Control of Small Enterprises” will be put on the agenda and will be implemented on January 1,2017.China's internal control standard system is initially established and gradually improved,which will play a positive role in promoting the development of China's capital market.The quality of the internal control will help decrease the cost of debt financing.This paper studies the present situation and problems of internal control and debt financing of listed companies,and the correlation between the quality of internal control and the cost of debt financing by using the normative research method,empirical research method and literature research method.And further study on the relationship between the internal control and the cost of debt financing through the local government behavior,the nature of enterprise property rights and the degree of competition in the industry,and puts forward some suggestions on how to improve the internal control and reduce the debt financing cost of listed companies.The results show that the quality of internal control is significantly negatively related to the cost of debt financing,and the positive effect of internal control quality on the cost of debt financing is more significant under non-state property rights,low level government intervention and high level industry competition.This paper consists of seven chapters.The first chapter is the introduction,mainly introduces the background,significance and domestic and foreign research summary.The second chapter is related concepts and theoretical support of internal control and debt financing cost.The third chapter analyzes the present situation and existing problems of the internal control and the cost of debt financing.The fourth chapter analyzes the mechanism and measurement of the impact of internal control on the cost of debt financing.The fifth chapter selects the debt financing cost,the internal control quality and other control variables to carry on the empirical research to their correlation.The sixth chapter is proposals based on the status quo,problems analysis and empirical research results,targeted to improve the internal control of enterprises and reduce the cost of debt financing.The seventh chapter is conclusion and the prospect of future research.