Journal article
Short-Term Debt Maturity Structures, Credit Ratings, and the Pricing of Audit Services
The Accounting Review, Vol.85(3), pp.877-909
2010
Abstract
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.
Details
- Title
- Short-Term Debt Maturity Structures, Credit Ratings, and the Pricing of Audit Services
- Authors
- Ferdinand A. Gul (Author) - Hong Kong Polytechnic UniversityJohn Goodwin (Author) - Hong Kong Polytechnic University
- Publication details
- The Accounting Review, Vol.85(3), pp.877-909
- Publisher
- American Accounting Association
- DOI
- 10.2308/accr.2010.85.3.877
- ISSN
- 1558-7967
- Organisation Unit
- University of the Sunshine Coast, Queensland; School of Business and Creative Industries
- Language
- English
- Record Identifier
- 99679189702621
- Output Type
- Journal article
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