Auditor Scrutiny of Loan Loss Estimates and Bank Lending: Evidence from PCAOB Inspections

• 成果类型: Article
• 署名作者: Ege, Matthew; Nicoletti, Allison; Stuber, Sarah B.
• 署名单位: Texas A&M University System; Texas A&M University College Station; Mays Business School; University of Pennsylvania
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2023-0690
• 发表日期: 2025
• 页码: 221-248
• 关键词: management; QUALITY; improve; FIRMS

摘要

We examine whether auditor scrutiny over the allowance for loan losses (ALL) is associated with bank lending decisions. Using PCAOB inspection findings over the ALL to capture increases in auditor scrutiny, we find that auditor scrutiny is associated with a larger ALL for homogeneous loans (i.e., residential mortgages and consumer loans) but not for heterogeneous loans (i.e., commercial real estate; commercial and industrial loans). We next find that auditor scrutiny is associated with a shift in lending away from homogeneous loans, consistent with auditor scrutiny reducing the relative attractiveness of homogeneous loans. These findings suggest that policymakers and audit regulators can indirectly affect bank lending by exercising their authority in ways that affect auditor scrutiny.