The Research On The Influence Of Tax Enforcement And Accounting Conservatism On The Cost Of Debt

In order to implement the policy of a sound social credit system," Bank Tax Interaction" activities have been carried out throughout our country.These activities are helpful to develop enterprises and solve difficult or costly financing problems.Banks will share the results of enterprise tax credit with tax enforcement departments in the same area.And banks will lend lower cost and more debt funds to enterprises,which have great rate-paying credit grade.In fact,the economic activities of enterprises will be affected by some external factors.The role of tax enforcement should not be underestimated in urging enterprises to carry out the obligations to pay tax and influencing corporate financing decisions.Accounting conservatism has a profound influence on the development of accounting theory and the economic activities of the enterprises,especially in the aspect of debt financing.At the same time,tax enforcement also puts forward different requests towards accounting conservatism.Therefore,this article will examine how the tax enforcement and accounting conservatism affect the cost of debt financing fi om internal and external perspectives.Based on the theory of asymmetric information,principal-agent theory,modern contract theory and the legal basis,we use the 2010-2014 listed companies in Shanghai and Shenzhen Stock Exchange as research samples.By using empirical research methods,we research the interactive effects of tax enforcement and accounting conservatism on the cost of debt financing.At the same time,we further research that whether the relationship of tax enforcement,accounting conservatism and the cost of debt is more prominent on the basis of the nature of property rights and industry policy.We draw the following conclusions:(1)There is a significantly negative correlation between tax enforcement and the cost of debt financing;(2)There is a significantly negative correlation between the accounting conservatism and the cost of debt financing;(3)The negative correlation between the accounting conservatism and cost of debt financing is more significant in the region of a more intense tax enforcement;(4)Relative to the state-owned enterprises,the negative correlation between the accounting conservatism and the cost of debt financing is more significant when it comes to private enterprises in the region of a more intense tax enforcement;(5)The negative correlation between accounting conservatism and the cost of debt financing is more significant in those enterprises in the region of a more intense tax enforcement,which are not supported by the industrial policies.Finally,we summarize the research conclusion of this article and put forward some related suggestions on the basis of previous chapters.