Does auditor quality and tenure matter to investors? Evidence from the bond market

• 成果类型: Article
• 署名作者: Mansi, SA; Maxwell, WF; Miller, DP
• 署名单位: Virginia Polytechnic Institute & State University; University of Arizona; Indiana University System; Indiana University Bloomington
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2004.00156.x
• 发表日期: 2004
• 页码: 755-793
• 关键词: CORPORATE DISCLOSURE; AGENCY COSTS; INFORMATION; insurance; RISK; COMMUNICATION; equilibrium; OWNERSHIP; earnings; returns

摘要

We examine the relation between auditor characteristics (quality and tenure) and the cost of debt financing. Consistent with the hypothesis that audit characteristics are important to the capital markets, we find that (1) auditor quality and tenure are negatively and significantly related to the cost of debt financing, (2) the relation between auditor characteristics and the cost of debt is most pronounced in firms with debt that is noninvestment grade, and (3) both the insurance and information role of audits are economically significant to the cost of debt. Overall, our results suggest that, through their dual roles of providing information and insurance, auditor quality and tenure matter to capital market participants.