Corporate Short-term Debt Financing,Audit Quality And Stock Price Collapse Risk

Since the reform and opening up of China,China's capital market has developed rapidly,in which the stock market is known as the Pearl of the crown,but the development of China's stock market is not smooth.The global financial crisis in 2008 and the stock disaster in 2015 have had a tremendous impact on China's stock market.Many investors have also lost tremendous wealth overnight,so how to prevent stock price collapse? Trading risk has also become a hot topic in recent years.The predecessors have conducted extensive research on the influencing factors and mechanism of stock price crash.As for the influencing factors of stock price collapse,the previous research perspectives are varied,involving macroeconomic environment and micro-enterprise governance,etc.However,the impact of short-term debt financing ratio on stock price collapse is seldom covered by relevant literature.On the other hand,although our country is building a multilevel capital market and is committed to enriching the financing channels of enterprises,in the short term,debt financing is still the main financing mode of enterprises.On average,nearly half of the corporate liabilities come from short-term debt financing that matures within one year.Many scholars have studied the economic consequences of debt financing.However,previous literatures mainly focused on the impact of debt financing on corporate performance and corporate behavior.There are few previous studies on whether debt financing will lead to stock price collapse.Therefore,it is of great theoretical and practical significance to study the relationship between short-term debt financing ratio and stock price collapse risk.On the other hand,the quality of audit represents the quality and effect of audit report.Audit quality plays an important role in alleviating information asymmetry between enterprises and investors.Previous people have different ways to measure the quality of audit,but the main way is to use audit institutions and audit opinions to measure.This thesis verifies whether audit quality can effectively alleviate the relationship between short-term debt and stock price crash,and provides effective solutions for the phenomena found before.This thesis uses the data of A-share listed companies in Shanghai and Shenzhen Stock Exchange from 2010 to 2017 to verify the relationship between the two.After eliminating the unnecessary data,this thesis makes an empirical analysis of the remaining samples.The regression results show that there is a significant positive correlation between the short-term debt financing ratio and the risk of stock price crash.That is to say,the rise of the short-term debt financing ratio will aggravate the stock price of enterprises.We use Four Big Accounting Firms to represent the companies that accept the high-quality audit process,and use the audit institutions to issue non-standard and unreserved audit opinions to represent the audit institutions to produce high-quality audit results on the listed companies,and set virtual variables for the two indicators.This thesis divides into The Four Big groups and non-Four Big groups,non-standard opinion group and standard opinion group,and then carries out grouping regression.The regression results show that both highquality audit process input and high-quality audit output can effectively suppress the positive correlation between short-term debt financing ratio and stock price crash.Therefore,we can conclude that the rising proportion of short-term debt financing will lead to the risk of stock price crash,and high-quality audit can effectively suppress the occurrence of this situation.Because we think that the high proportion of short-term debt will lead to earnings management behavior of enterprises,and the literature has proved that earnings management behavior is the root cause of stock price collapse,so we further verify the relationship between short-term debt ratio and earnings management.Empirical evidence shows that the proportion of shortterm debt of enterprises is higher,and the level of earnings management of enterprises is also higher.Therefore,confirms the conjecture of this thesis.