Media Coverage,Auditing Opinions And Debt Financing Cost

At present,China's enterprises are in a weak macroeconomic environment and under the high financing pressure,the development of enterprises are limited the problem of “financing difficulties” and “high cost of financing”.The financing channels of enterprises mainly come from debt financing and equity financing.Compared with the method of equity financing,debt financing has the advantages of fast financing speed,simple formalities,forming financial lever,and produces tax deduction effect,so it is not only favored by many enterprises in the economic market,but also has been paid much attention by theorists.Media report and independent audit are two important methods of corporate external governance,so it is necessary to study whether they can help enterprises to improve their debt management level and how to help them reduce their debt financing cost.The core of this thesis is to study the media report,audit opinion and under the mutual action how to influence the debt financing cost of enterprises.First,on the basis of reviewing a large number of existing research results,this paper expounds the theoretical basis of the study,including information asymmetry theory,principal-agent theory,reputation theory and risk-return equivalence principle.Secondly,basing on the theoretical basis,the paper further analyzes the mechanism of media report,audit opinion and the joint effect on debt financing cost.Then,the paper takes the 2012-2016 Shanghai A-shares listed companies as a sample,and puts forward the research hypothesis,then aims to the hypothesis and does the empirical test.Through the whole research,the following conclusions are drawn:(1)standard audit opinion can significantly reduce the debt financing cost of enterprises;(2)The more the number of negative media reports,the higher the cost of debt financing;(3)the more non-negative media reports,the lower the cost of enterprise debt financing;(4)more negative media coverage will weaken the effect of the standard audit opinion's effect declining on the debt financing cost;(5)if the number of non-negative media reports are increasing,the standard without reservation's effect of reducing the debt financing cost will be stronger.According to the research conclusion,this paper puts forward the following policy suggestions:(1)the CPA should practise in accordance with the law and in a prudent manner so that the audit work process conforms to the requirements of the practice criterion and the Code of Professional ethics,and the audit opinion is appropriate,there will naturally be no situation that affects the debt financing cost of listed companies due to improper issuing of non-standard audit opinions;(2)the enterprise should strengthen the communication with the news media,convey the good news of the enterprise positively to the stakeholders,and reduce the debt financing cost by the media public opinion function.At the same time,enterprises should strengthen management,improve governance,strive for less,preferably not a negative problem,naturally there will be little or no negative media reports,and will not have the resulting debt financing costs increased;(3)The Government should increase its supervision of the media industry.The content tendency of media report has important influence on the financing behavior of enterprises and the interests of investors,so it is very important for the media industry to create a fair,objective and independent industry development environment.Government departments should establish a sound management system to the media industry,increase industry supervision.