Bank Monitoring and Financial Reporting Quality: The Case of Accounts Receivable-Based Loans

• 成果类型: Article
• 署名作者: Frankel, Richard; Kim, Bong H.; Ma, Tao; Martin, Xiumin
• 署名单位: Washington University (WUSTL); Seoul National University (SNU); Texas Tech University System; Texas Tech University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12595
• 发表日期: 2020
• 页码: 2120-2144
• 关键词: private information; credit; conservatism; RISK

摘要

Using novel receivable-based loan data, we study the effect of aging-report loan covenants on borrowers' accounts receivable reporting quality. Our purpose is to highlight a channel that lenders use to obtain private information and to understand whether lenders' information acquisition affects the financial reporting quality of borrowers. Compared to receivable-based borrowers without aging-report requirements (control firms), borrowers with such requirements (test firms) increase their receivable reporting quality significantly after loan initiations. The shift in reporting quality is more pronounced when borrowers have weak bargaining power. Our results lend support to the argument that lender information access affects borrowers' reporting quality.