Short-Term Debt Maturity Structures, Credit Ratings, and the Pricing of Audit Services

• 成果类型: Article
• 署名作者: Gul, Ferdinand A.; Goodwin, John
• 署名单位: Hong Kong Polytechnic University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2010.85.3.877
• 发表日期: 2010
• 页码: 877-909
• 关键词: free cash flow; corporate governance; LITIGATION RISK; AGENCY COSTS; default swap; fees; determinants; management; OWNERSHIP; PREMIUMS

摘要

Short-term debt and credit ratings have benefits for financial reporting quality that may be associated with lower audit fees. Using U. S. data for 2003 through 2006, we find that short-term debt is negatively related to audit fees for firms rated by Standard & Poor's, consistent with more monitoring and better governance mechanisms in firms with higher short-term debt. Credit ratings quality is negatively related to audit fees, consistent with ratings quality reflecting a firm's liquidity risk, governance mechanisms, and monitoring from rating agencies. We also find that the negative relation between short-term debt and audit fees is stronger for firms with low-quality credit ratings, consistent with auditors pricing lender monitoring.