Accounting Conservatism And Debt Financing Cost

Accounting conservatism refers to accountant who estimate the risks and losses that may occur in an uncertain accounting environment.Accounting conservatism not only alleviate the agency conflicts,but also reduce the investment risk of external investors and creditors.Debt financing plays an important role in raising funds.This paper attempts to study the relationship between accounting conservatism and debt capital cost.The research object is Chinese A-share listed companies,selecting the open financial data from 2013 to 2017.The accounting conservatism is analyzed by c_score mode l proposed by K&W in 2009.The debt capital cost is measured by the ratio of financial cost to average interest-bearing liabilities.Take asset size,asset-liability ratio,debt financing structure,enterprise growth and ownership concentration as control variables,establishing a multiple regression model between them.According to the different standards,the paper divides the data into the main board and SME board,state-owned holding enterprises and non-state-owned holding enterprises,manufacturing and non-manufacturing industries to explore the influence direction and degree.The results show that the accounting conservatism level of A-share listed companies on SME is higher than main board,non-state-owned motherboard is higher than state-owned listed companies,manufacturing industries is higher than non-manufacturing industries.It is all negative correlation between accounting conservatism and debt capital cost.Besides,SMEs,non-state-owned companies and manufacturing industries are stronger than others.According to the analysis,the paper puts forward relevant suggestions to relevant personnel.Listed companies should recognize the important role of accounting conservatism;creditors should abandon the bad concept of credit disc rimination,pay attention to accounting conservatism;supervisory departments should strengthen the monitoring of enterprise information quality and cultivate a good environment for enterprise survival.