Financial Reporting Quality, Debt Maturity, and the Cost of Debt: Evidence from China

2013 ◽  
Vol 49 (sup4) ◽  
pp. 236-253 ◽  
Author(s):  
Chao Chen ◽  
Song Zhu
Keyword(s):  
Financial Reporting ◽  
Reporting Quality ◽  
Debt Maturity ◽  
Financial Reporting Quality ◽  
Cost Of Debt ◽  
The Cost

Financial reporting quality and the cost of debt of SMEs

2015 ◽  
Vol 45 (1) ◽  
pp. 149-164 ◽  
Author(s):  
Heidi Vander Bauwhede ◽  
Michiel De Meyere ◽  
Philippe Van Cauwenberge
Keyword(s):  
Financial Reporting ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Cost Of Debt ◽  
The Cost

Voluntary IFRS Adoption by Unlisted European Firms: Impact on Earnings Quality and Cost of Debt

2020 ◽  
Vol 55 (03) ◽  
pp. 2050013
Author(s):  
Mara Cameran ◽  
Domenico Campa
Keyword(s):  
Financial Reporting ◽  
Positive Impact ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Cost Of Debt ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Cost ◽  
The Impact ◽  
Unlisted Firms

This paper investigates the impact of the voluntary adoption of International Financial Reporting Standards (IFRS) by unlisted firms on both their financial reporting quality and cost of debt. Using a large international sample of unlisted EU companies for which the choice of IFRS is voluntary, we find that IFRS adoption has a positive impact on financial reporting quality and results in a decrease in the cost of debt. In addition, unlisted firms adopting IFRS are more likely to be acquired or go public in the years subsequent to the adoption, relative to other unlisted firms. We document a tangible benefit of voluntary IFRS adoption by unlisted firms.

Integrated reporting, financial reporting quality and cost of debt

2020 ◽  
Vol 28 (3) ◽  
pp. 517-534 ◽  
Author(s):  
Mohammad Badrul Muttakin ◽  
Dessalegn Mihret ◽  
Tesfaye Taddese Lemma ◽  
Arifur Khan
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Cost Of Debt ◽  
Inverse Association ◽  
Integrated Reporting ◽  
Financial Reports ◽  
Content Type ◽  
Debt Market

Purpose Although proponents of integrated reporting (IR) advocate that this emerging practice has the potential to transform corporate reporting, the eventuation of this expectation would depend on the incentive IR provides to firms. This study aims to examine whether IR is associated with cost of debt and whether IR moderates the relationship between financial reporting quality and cost of debt. Design/methodology/approach Based on insights drawn from information asymmetry and agency theories, the authors develop models that link IR and financial reporting quality with a firm’s cost of debt. The authors analyze 847 firm-year observations drawn from non-financial firms traded on the Johannesburg Stock Exchange, for the period between 2009 and 2015. Findings The authors find that firms that provide integrated reports tend to have a lower cost of debt than those do not provide IR. The authors also find an inverse association between financial reporting quality and cost of debt, and that integrated reports accentuate this association. The findings suggest that the debt market perceives value in the information presented in integrated reports beyond what is furnished in financial reports. Originality/value To the best of the authors’ knowledge, this study is the first to document evidence suggesting that the debt market perceives value in the information presented in integrated reports, beyond what is furnished in financial reports.

Auditor Changes and the Cost of Bank Debt

2016 ◽  
Vol 92 (3) ◽  
pp. 155-184 ◽  
Author(s):  
Bill B. Francis ◽  
Delroy M. Hunter ◽  
Dahlia M. Robinson ◽  
Michael N. Robinson ◽  
Xiaojing Yuan
Keyword(s):  
Financial Reporting ◽  
Reporting Quality ◽  
Bank Loans ◽  
Financial Reporting Quality ◽  
Bank Debt ◽  
Market Participants ◽  
Research Designs ◽  
Private Credit ◽  
Loan Spreads ◽  
The Cost

ABSTRACT We examine the response of informed market participants to the informational signal of auditor changes. Using propensity score matching and difference-in-differences research designs, we document that loan spreads increase by 22 percent on bank loans initiated within a year after auditor changes, increasing direct loan costs by approximately $6.6 million. We also find a significant increase in upfront and annual fees and the probability of pledging collateral, consistent with an increase in screening and monitoring by banks. The increase in spreads is significant for client-initiated auditor changes, with or without disagreements with the auditor, as well as for auditor resignations. Further, the significant increase in loan spreads is documented for upward, lateral, and downward auditor changes. Our results are robust to other proxies for financial reporting quality. Finally, we find no effect resulting from the forced auditor changes due to Arthur Andersen. Collectively, these results suggest that voluntary auditor changes increase information risk, which is priced in private credit markets. JEL Classifications: G20; G21; G32; K22.

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