Audit quality and cost of debt

audit quality and cost of debt Recent findings indicate that big 4 audits are associated with decreased cost of debt capital (pittman & fortin, 2004 mansi et al, 2004) consistent with the view that perceived audit quality affects debt pricing, dhaliwal et al (2008) found that among clients of big 4 auditors, the cost of debt decreased (increased) with audit (non-audit) fees.

Cost of debt and cost of equity: cost of debt is the interest rate and the cost of equity is the expected rate of return demanded by investors in the firm’s common stock the issue at hand is finding the correct costs of debt and equity in order to find an accurate calculation of wacc.

audit quality and cost of debt Recent findings indicate that big 4 audits are associated with decreased cost of debt capital (pittman & fortin, 2004 mansi et al, 2004) consistent with the view that perceived audit quality affects debt pricing, dhaliwal et al (2008) found that among clients of big 4 auditors, the cost of debt decreased (increased) with audit (non-audit) fees.

The purpose of this paper is to examine the value relevance of the perceived audit quality in terms of who audits, as well as the audit outcomes in terms of the auditor's opinion and accruals quality, in the pricing of debt capital for privately held firms, by examining a large sample of privately. Cost of debt and earnings quality under financial crisis of 2008 the results from table 2h , table 2i indicate that there is ambiguity about the relationship between cost of debt and earnings quality.

Audit quality, earnings quality and the cost of equity capital abstract we investigate the influence of audit quality on the relation between earnings quality lower cost of debt capital none of these audit quality studies controls for earnings quality research showing.

Audit quality and cost of debt capital for private firms: evidence from finland jukka karjalainen department of business university of eastern finland april 10, 2010 abstract the purpose of this paper is to examine the value relevance of the perceived audit quality in. Regard to the relationship between audit quality and cost of debt capital compare to the mentioned proxies for audit quality the size, auditor choice, reputation, brand name, audit fees and industrial-expertise of audit firms have influences on audit quality especially, the two-tier auditing industry provides chances to analyze the.

Audit quality and cost of debt

The findings indicate that big 4 audits and audits with more than one responsible auditor are associated with a decreased cost of debt capital also, firms with modified audit reports and those with lower quality accruals have a higher cost of debt capital.

  • How to cite karjalainen, j (2011), audit quality and cost of debt capital for private firms: evidence from finland international journal of auditing, 15: 88–108.

The purpose of this paper is to examine the value relevance of the perceived audit quality in terms of who audits, as well as the audit outcomes in terms of the auditor's opinion and accruals quality, in the pricing of debt capital for privately held firms, by examining a large sample of privately held finnish firms.

audit quality and cost of debt Recent findings indicate that big 4 audits are associated with decreased cost of debt capital (pittman & fortin, 2004 mansi et al, 2004) consistent with the view that perceived audit quality affects debt pricing, dhaliwal et al (2008) found that among clients of big 4 auditors, the cost of debt decreased (increased) with audit (non-audit) fees.
Audit quality and cost of debt
Rated 3/5 based on 12 review
Download