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Investor protection, firm informational problems, big N auditors, and cost of debt around the world
journal contribution
posted on 2013-08-01, 00:00 authored by Ferdinand GulFerdinand Gul, G S Zhou, X K ZhuThis paper examines the effects of investor protection, firm informational problems (proxied by firm size, firm age, and the number of analysts following), and Big N auditors on firms' cost of debt around the world. Using data from 1994 to 2006 and over 90,000 firm-year observations, we find that the cost of debt is lower when firms are audited by Big N auditors, especially in countries with strong investor protection. Second, we find that firms with more informational problems (i.e., higher information asymmetry problems) benefit more from Big N auditors in terms of lower cost of debt only in countries with stronger investor protection.
History
Journal
Auditing: a journal of practice and theoryVolume
32Issue
3Pagination
1 - 30Publisher
American Accounting AssociationLocation
Sarasota, Fla.Publisher DOI
ISSN
0278-0380eISSN
1558-7991Language
engPublication classification
C1.1 Refereed article in a scholarly journal; C Journal articleCopyright notice
2013, American Accounting AssociationUsage metrics
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No categories selectedKeywords
Social SciencesBusiness, FinanceBusiness & Economicsinvestor protectioninformational problemsinformation asymmetryaudit qualitycost of debtCROSS-COUNTRY EVIDENCELEGAL LIABILITY REGIMESEARNINGS QUALITYINDUSTRY SPECIALIZATIONACCOUNTING INFORMATIONCORPORATE GOVERNANCEPOLITICAL-ECONOMYVALUE RELEVANCEMARKETDISCLOSURE
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