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Do audited firms have lower cost of debt?
Högskolan Dalarna, Mikrodataanalys.
Högskolan Dalarna, Företagsekonomi.ORCID iD: 0000-0002-5043-6289
HUI Research.
2018 (English)Report (Other academic)
Abstract [en]

The purpose of this study is to investigate if audited financial statements add value for firms in the private debt market. Using an instrumental variable method, we find that firms with audited financial statements, on average, save 1.26 percentage points on cost of debt compared to firms with unaudited financial statements. We also find that using the big, well-known auditing firms does not yield additional cost of debt benefits. Lastly, we find that the effect of audit on cost of debt varies between industries. As such, we find that firms in industries that have been identified in previous studies to have a more complex information structure, and therefore more complex auditing process, also save more on cost of debt relative to other industries when audited.

Place, publisher, year, edition, pages
2018. , p. 36
Series
HUI Working Paper ; 132
Keywords [en]
Audit reform, Audit complexity, SMEs, Private limited firms
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
URN: urn:nbn:se:hig:diva-28501OAI: oai:DiVA.org:hig-28501DiVA, id: diva2:1263012
Available from: 2018-11-14 Created: 2018-11-14 Last updated: 2018-11-19Bibliographically approved

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Huq, AsifHartwig, Fredrik

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard-cite-them-right
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • sv-SE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • de-DE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf