You are not logged in.

The effect of auditor quality on financing decisions

Chang, Xin, Dasgupta, Sudipto and Hilary, Gilles 2009, The effect of auditor quality on financing decisions, Accounting review, vol. 84, no. 4, pp. 1085-1117, doi: 10.2308/accr.2009.84.4.1085.

Attached Files
Name Description MIMEType Size Downloads

Title The effect of auditor quality on financing decisions
Author(s) Chang, Xin
Dasgupta, Sudipto
Hilary, Gilles
Journal name Accounting review
Volume number 84
Issue number 4
Start page 1085
End page 1117
Total pages 48
Publisher American Accounting Association
Place of publication Sarasota, Fla.
Publication date 2009-07
ISSN 0001-4826
1558-7967
Keyword(s) auditor quality
financial decisions
adverse selection
capital structure
Summary We present a model and provide empirical evidence showing that auditor quality affects the financing decisions of companies, and that higher audit quality reduces the impact of market conditions on client financial decisions and capital structure. Consistent with our analytical predictions, we find that companies audited by Big 6 firms are more likely to issue equity as opposed to debt than are those audited by small audit firms. We also find that companies audited by Big 6 auditors are able to make larger equity issues than are those audited by small auditors, but the difference narrows when market conditions improve. Additional results show that the debt ratios of companies decrease less in response to favorable market conditions when auditor quality is high, at least over the medium term.
Language eng
DOI 10.2308/accr.2009.84.4.1085
Field of Research 150205 Investment and Risk Management
1501 Accounting, Auditing And Accountability
Socio Economic Objective 970115 Expanding Knowledge in Commerce
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2009, American Accounting Association
Persistent URL http://hdl.handle.net/10536/DRO/DU:30085862

Document type: Journal Article
Collection: Department of Finance
Connect to link resolver
 
Unless expressly stated otherwise, the copyright for items in DRO is owned by the author, with all rights reserved.

Versions
Version Filter Type
Citation counts: TR Web of Science Citation Count  Cited 31 times in TR Web of Science
Scopus Citation Count Cited 43 times in Scopus
Google Scholar Search Google Scholar
Access Statistics: 19 Abstract Views, 1 File Downloads  -  Detailed Statistics
Created: Fri, 02 Sep 2016, 14:55:21 EST

Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.