A Study on the Relationship between Earnings Quality and Capital Cost-Takes the China Listed Companies as a Sample

The phenomenon of false financial statements still exists. However, in addition to the risk of being punished, what kind of price do companies have to pay? In recent decades, with China's rapid progress in economic, the relevant accounting system and corporate governance standards are actively improving, and the earnings quality is improving. This paper takes China's listed companies from 2015 to 2019 as samples, and adopts quantile regression supplemented by ordinary least square method to explore the relationship between earnings quality and capital cost. The research findings show that the higher the earnings management, the higher the capital cost, especially for the company with low capital cost. Nevertheless, for the extremely company with high capital cost, earnings management can reduce the capital cost. The research results can provide the focus of regulators of listed companies and reference for the revision of relevant accounting system.