Research On The Impact Of Auditor's Reputation On The Cost Of Corporate Debt Financing

With the occurrence of the Yin Guang xia Incident happened,which is one of the series of audit failure cases,auditors have been brought into the public's vision,and the image of auditors is also receiving attention.In 2016,the CICPA issued the �Guide to Brand Building of Accounting Firms� proposed that the CPA profession needs to cultivate high-quality and comprehensive firms,promote the brand building of accounting firms,and build a high-profile accounting firm.This provides a good basis for the auditor's reputation in the formation of the capital market and the effective operation of the auditor's reputation mechanism.In terms of the debt market,in 2015,the �three eliminations,one reduction,one subsidy� policy was proposed to help enterprises reduce costs and solve the problem of expensive financing and financing difficulties.Due to the auditor's external supervision function,enterprises can use the information transfer and guarantee functions of the auditor's reputation to alleviate the information asymmetry of creditors and debtors,reduce the agency cost of enterprises and reduce the cost of debt financing.Therefore,this paper takes the 2015-2017 A-share listed company as a sample,mainly studies Chinese transformation and upgrading,and the impact of auditor's reputation on corporate debt financing costs.And based on credit decision research,exploring the impact of auditor reputation on corporate debt financing costs under different property rights and different industry competition environments.In terms of research content,this paper expounds the impact of auditor reputation on corporate debt financing costs and proposes hypotheses based on relevant theories.When adopting the substitution variables of high-reputation auditors,it is not simply to use the �big four� and the �15th National CPA Office� as a representative of high-reputation auditors,it is composed of three first-level indicators of human capital,material capital and internal governance of accounting firms,and 11 secondary indicators constitute the auditor's reputation index system.The comprehensive evaluation score of auditor's reputation is obtained through the entropy model as an alternative indicator of auditor's reputation,and the role of auditor's reputation in the debt market is further explored.Considering the external factor of industry competition,this paper combines industry competition with auditing to study the impact of auditor reputation on debt market.The study found that:(1)the reputation of the auditor is negatively related to the cost of corporate debt financing.(2)Compared with stateowned enterprises,the reputation of auditors has a greater impact on the debt interest cost of private enterprises.(3)The degree of competition in the industry can weaken the impact of the auditor's reputation on the cost of corporate debt financing.Compared with the enterprises with fierce competition in the industry,the auditor's reputation is more effective in reducing the cost of debt financing in enterprises with less competitive industries.