Common Auditors and Private Bank Loans*

Francis, JR; Wang, W

Common Auditors and Private Bank Loans*

Francis, JR Wang, W

Permalink

Publisher:: WILEY
Publication Type:: Journal Article
Citation:: Contemporary Accounting Research, 2021, 38, (1), pp. 793-832
Issue Date:: 2021-03-01

Closed Access

	Filename	Description	Size
	1911-3846.12617.pdf	Published version	342.2 kB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Francis, JR
dc.contributor.author	Wang, W
dc.date.accessioned	2021-12-12T07:58:00Z
dc.date.available	2021-12-12T07:58:00Z
dc.date.issued	2021-03-01
dc.identifier.citation	Contemporary Accounting Research, 2021, 38, (1), pp. 793-832
dc.identifier.issn	0823-9150
dc.identifier.issn	1911-3846
dc.identifier.uri	http://hdl.handle.net/10453/152244
dc.description.abstract	We show that when banks and borrowers share the same audit firm, borrowers receive lower interest rates, after controlling for potentially confounding director connectedness. The common auditor effect is observed only for opaque borrowers, and is greatest when the same audit engagement office audits the bank and borrower. A common auditor connection also matters more for longer-tenured auditors, for geographically proximate borrowers, and when the syndicate involves fewer lenders. The effect does not hold for auditors recently sanctioned by the PCAOB. Finally, the interest rate discount is not the consequence of homophily or biased decision making, based on a comparison of postloan performance of firms with common auditor loans versus those with noncommon auditor loans.
dc.language	English
dc.publisher	WILEY
dc.relation.ispartof	Contemporary Accounting Research
dc.relation.isbasedon	10.1111/1911-3846.12617
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1501 Accounting, Auditing and Accountability
dc.subject.classification	Accounting
dc.title	Common Auditors and Private Bank Loans*
dc.type	Journal Article
utslib.citation.volume	38
utslib.for	1501 Accounting, Auditing and Accountability
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access	*
pubs.consider-herdc	false
dc.date.updated	2021-12-12T07:57:59Z
pubs.issue	1
pubs.publication-status	Published
pubs.volume	38
utslib.citation.issue	1

Abstract:

We show that when banks and borrowers share the same audit firm, borrowers receive lower interest rates, after controlling for potentially confounding director connectedness. The common auditor effect is observed only for opaque borrowers, and is greatest when the same audit engagement office audits the bank and borrower. A common auditor connection also matters more for longer-tenured auditors, for geographically proximate borrowers, and when the syndicate involves fewer lenders. The effect does not hold for auditors recently sanctioned by the PCAOB. Finally, the interest rate discount is not the consequence of homophily or biased decision making, based on a comparison of postloan performance of firms with common auditor loans versus those with noncommon auditor loans.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/152244