Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry
Autor(a) principal: | |
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Data de Publicação: | 2022 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional da UNESP |
Texto Completo: | http://dx.doi.org/10.22434/IFAMR2020.0033 http://hdl.handle.net/11449/233918 |
Resumo: | Evidence is mixed regarding the economic benefits achieved by companies hiring large firms to audit their financial statements. The studies approaching this theme concentrate mostly on public companies in developed markets, while the effect on private firms in emerging markets is still an open question. This research explores this gap by analyzing whether private firms in the Brazilian sugarcane industry audited by a Big 4 have a lower cost of debt than those audited by a non-Big 4. For that, a unique, hand-collected, dataset was used. This paper contributes to the literature by providing evidence of the role of audit institutions in an environment lacking studies on private firms’ financial reports, especially in emerging economies. The empirical analysis does not indicate that the cost of debt is negatively influenced by the verification of financial statements by a high-quality auditor. Banks and credit unions, as the primary funding sources of the industry, condition the cost of debt reduction to the levels of tangibility, leverage, and profitability. We also contribute to the literature by demonstrating that lenders may have other soft information sources, obtained through banking relationship, which may substitute higher-quality auditor. The results hold after robustness checks and endogeneity concerns |
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Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industryAgribusinessAuditBig 4 auditorEmerging marketsEvidence is mixed regarding the economic benefits achieved by companies hiring large firms to audit their financial statements. The studies approaching this theme concentrate mostly on public companies in developed markets, while the effect on private firms in emerging markets is still an open question. This research explores this gap by analyzing whether private firms in the Brazilian sugarcane industry audited by a Big 4 have a lower cost of debt than those audited by a non-Big 4. For that, a unique, hand-collected, dataset was used. This paper contributes to the literature by providing evidence of the role of audit institutions in an environment lacking studies on private firms’ financial reports, especially in emerging economies. The empirical analysis does not indicate that the cost of debt is negatively influenced by the verification of financial statements by a high-quality auditor. Banks and credit unions, as the primary funding sources of the industry, condition the cost of debt reduction to the levels of tangibility, leverage, and profitability. We also contribute to the literature by demonstrating that lenders may have other soft information sources, obtained through banking relationship, which may substitute higher-quality auditor. The results hold after robustness checks and endogeneity concernsDepartment of Accounting School of Economics Business Administration and Accounting University of Sao Paulo (USP), Av dos Bandeirantes, 3900 FEA RP, 14040 905Department Of Economy Administration And Education Sao Paulo State University (UNESP) School Of Agricultural And Veterinarian Sciences Jaboticabal, Rod Prof Paulo Donato Castellane, S N, 14.884900University of Florida Warrington College of Business, Gerson HallDepartment Of Economy Administration And Education Sao Paulo State University (UNESP) School Of Agricultural And Veterinarian Sciences Jaboticabal, Rod Prof Paulo Donato Castellane, S N, 14.884900Universidade de São Paulo (USP)Universidade Estadual Paulista (UNESP)Warrington College of BusinessManoel, Aviner Augusto Silvada Costa Moraes, Marcelo BotelhoSantos, David Ferreira Lopes [UNESP]Pündrich, Gabriel Pereira2022-05-01T11:39:08Z2022-05-01T11:39:08Z2022-01-01info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article21-36http://dx.doi.org/10.22434/IFAMR2020.0033International Food and Agribusiness Management Review, v. 25, n. 1, p. 21-36, 2022.1559-2448http://hdl.handle.net/11449/23391810.22434/IFAMR2020.00332-s2.0-85121467901Scopusreponame:Repositório Institucional da UNESPinstname:Universidade Estadual Paulista (UNESP)instacron:UNESPengInternational Food and Agribusiness Management Reviewinfo:eu-repo/semantics/openAccess2024-06-06T14:54:18Zoai:repositorio.unesp.br:11449/233918Repositório InstitucionalPUBhttp://repositorio.unesp.br/oai/requestopendoar:29462024-08-05T14:51:56.328279Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP)false |
dc.title.none.fl_str_mv |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry |
title |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry |
spellingShingle |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry Manoel, Aviner Augusto Silva Agribusiness Audit Big 4 auditor Emerging markets |
title_short |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry |
title_full |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry |
title_fullStr |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry |
title_full_unstemmed |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry |
title_sort |
Audit quality and the cost of debt in private firms: evidence from the Brazilian sugarcane industry |
author |
Manoel, Aviner Augusto Silva |
author_facet |
Manoel, Aviner Augusto Silva da Costa Moraes, Marcelo Botelho Santos, David Ferreira Lopes [UNESP] Pündrich, Gabriel Pereira |
author_role |
author |
author2 |
da Costa Moraes, Marcelo Botelho Santos, David Ferreira Lopes [UNESP] Pündrich, Gabriel Pereira |
author2_role |
author author author |
dc.contributor.none.fl_str_mv |
Universidade de São Paulo (USP) Universidade Estadual Paulista (UNESP) Warrington College of Business |
dc.contributor.author.fl_str_mv |
Manoel, Aviner Augusto Silva da Costa Moraes, Marcelo Botelho Santos, David Ferreira Lopes [UNESP] Pündrich, Gabriel Pereira |
dc.subject.por.fl_str_mv |
Agribusiness Audit Big 4 auditor Emerging markets |
topic |
Agribusiness Audit Big 4 auditor Emerging markets |
description |
Evidence is mixed regarding the economic benefits achieved by companies hiring large firms to audit their financial statements. The studies approaching this theme concentrate mostly on public companies in developed markets, while the effect on private firms in emerging markets is still an open question. This research explores this gap by analyzing whether private firms in the Brazilian sugarcane industry audited by a Big 4 have a lower cost of debt than those audited by a non-Big 4. For that, a unique, hand-collected, dataset was used. This paper contributes to the literature by providing evidence of the role of audit institutions in an environment lacking studies on private firms’ financial reports, especially in emerging economies. The empirical analysis does not indicate that the cost of debt is negatively influenced by the verification of financial statements by a high-quality auditor. Banks and credit unions, as the primary funding sources of the industry, condition the cost of debt reduction to the levels of tangibility, leverage, and profitability. We also contribute to the literature by demonstrating that lenders may have other soft information sources, obtained through banking relationship, which may substitute higher-quality auditor. The results hold after robustness checks and endogeneity concerns |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-05-01T11:39:08Z 2022-05-01T11:39:08Z 2022-01-01 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://dx.doi.org/10.22434/IFAMR2020.0033 International Food and Agribusiness Management Review, v. 25, n. 1, p. 21-36, 2022. 1559-2448 http://hdl.handle.net/11449/233918 10.22434/IFAMR2020.0033 2-s2.0-85121467901 |
url |
http://dx.doi.org/10.22434/IFAMR2020.0033 http://hdl.handle.net/11449/233918 |
identifier_str_mv |
International Food and Agribusiness Management Review, v. 25, n. 1, p. 21-36, 2022. 1559-2448 10.22434/IFAMR2020.0033 2-s2.0-85121467901 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
International Food and Agribusiness Management Review |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
21-36 |
dc.source.none.fl_str_mv |
Scopus reponame:Repositório Institucional da UNESP instname:Universidade Estadual Paulista (UNESP) instacron:UNESP |
instname_str |
Universidade Estadual Paulista (UNESP) |
instacron_str |
UNESP |
institution |
UNESP |
reponame_str |
Repositório Institucional da UNESP |
collection |
Repositório Institucional da UNESP |
repository.name.fl_str_mv |
Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP) |
repository.mail.fl_str_mv |
|
_version_ |
1808128427749801984 |