Corporate Social Responsibility Information Disclosure, Auditor Personal Reputation And Corporate Debt Financing Costs

Financing plays a key role in the sustainable management of enterprises and the optimization of resource allocation.Financing difficulties have become the primary factor that restricts the rapid development of enterprises.This is due to the fact that securities regulatory authorities have strengthened the restrictions on equity financing of listed companies.According to the information asymmetry theory,debtors have absolute advantages over corporate information,and creditors do not have a complete understanding of corporate information,and there is information asymmetry between them.Creditors will compensate for this effect of information asymmetry by increasing the expected rate of return.The audit market,as a third-party independent department,plays an indispensable role in resolving the problem of proxy conflicts brought about by this asymmetric information.According to the signal transmission theory,the audit acts as an independent third-party organization to verify the financial information of the company,and provides reliable information to the creditor by providing reliable auditing reports.If the information with good audit quality is passed to creditors,the cost of debt financing will be reduced.However,if the auditor providing better audit quality suffer from a lack of independence and cause damage to the auditor’s personal reputation,the quality of the audit will also be affected,and the creditor will doubt the authenticity of the information reflected by the audit quality.This in turn will affect the cost of corporate debt financing.For enterprises,the corporate social responsibility information report is also an internal governance method.The "Corporate Law" requires that the disclosure of social responsibility information is a non-financial information,but it also plays the role of financial information.Some studies have shown that corporate social responsibility information can increase information transparency,alleviate information asymmetry,ease financing constraints,reduce agency conflicts,and thus reduce transaction costs and reduce estimation errors.The degree of information asymmetry between creditors and debtors may be reduced due to the higher disclosure level of corporate social responsibility information,mitigate the negative effects caused by the damage of the auditor’s personal reputation,and reduce the debt financing costs of these companies..This paper takes the asymmetry theory of information,signal transmission theory,and the insurance mechanism of reputation as the theoretical support,and selects the customer companies audited by the CSRC accounted for by the China Securities Regulatory Commission in 2007-2015 as the experimental sample,and according to a certain standard selection of matching samples for inspection,adding some control variables affecting the cost of debt financing,empirical analysis of the relationship between the auditor’s personal reputation and corporate debt financing costs and corporate social responsibility information disclosure regulation of the relationship between the two.The findings are consistent with the assumptions that(1)the damage of the auditor’s personal reputation will increase the cost of corporate debt financing,and(2)the higher level of corporate social responsibility information disclosure will reduce the damage of the auditor’s personal reputation against the financing of corporate debt.In order to make the research result more reliable,this paper uses two methods to test the robustness,that is,to replace the variable data measured by the explanatory variable and the variable data of the two phases of lag.The results verify the hypothesis.The study of this paper expands the research on the auditor’s personal reputation to a certain extent,and also provides a basis for the company to actively disclose the social responsibility report,and provides suggestions for enterprises to reasonably reduce the cost of debt financing.