Auditor's Reputation,social Trust And The Debt Financing Costs Of Enterprises

With the outbreak of the Novel coronavirus pneumonia epidemic in 2020,many enterprises have fallen into the dilemma of capital turnover.Debt financing is still their main external financing channel for Chinese enterprises in a transition economy,and debt financing cost is one of the key indicators that companies consider when making financial decisions.In order to ensure a virtuous cycle of the enterprise's capital chain,reducing the debt financing cost of the enterprise has become an important proposition of external financing of the enterprise.The debt financing cost of an enterprise is a judgment made by creditors based on factors such as the potential default risk arising from the company's financial information and other important non-financial information.Therefore,reducing the debt financing cost of an enterprise needs to start from the perspective of alleviating the information asymmetry between creditors and debt enterprises.As two important external factors influencing the cost of corporate debt financing,auditor's reputation and social trust can play an importantrole in alleviating the information asymmetry between the two parties in debt fund transactions.At the same time,under different levels of social trust,the effect of auditor's reputation on the cost of corporate debt financing will be different.Furthermore,under different levels of social trust,the reputation of auditors will also have different effects on the cost of debt financing of enterprises with different property rights.This paper takes China's A-share non-financial listed companies from 2010 to 2018 as the research object,using the comprehensive ranking of accounting firms,China Comprehensive Social Survey(CGSS)-related data,other financial data,and China's market-oriented indexes to conduct research on auditor's reputation,social trust and the debt financing costs of enterprises.This paper draws conclusions through empirical research: The higher the reputation of the auditors hired by the company,the lower the cost of debt financing,and the higher level of the reputation of the auditors has a more significant impact on the debt financing costs of non-state-owned enterprises;The higher the level of social trust in the area where the company is located,the lower the cost of debt financing,and the higher level of social trusthas a more significant impact on the debt financing costs of non-state-owned enterprises;At different levels of social trust,auditor's reputation has a more significant impact on the debt financing costs of companies with low levels of social trust;Compared with state-owned enterprises,under different levels of social trust,auditor ' s reputation has a more significant impact on the debt financing costs of non-state-owned enterprises with low levels of social trust.At the same time,this paper conducted robustness tests to verify the reliability of the conclusion of this article.Finally,this paper puts forward relevant suggestions from the four levels of accounting firm,informal system,enterprise and capital market.