The value of audit quality in public and private companies: evidence from Spain

This paper compares the value of audit quality, proxied by the selection of a big N auditor, to the external claimholders of private and public companies. Although the combination of a lower ownership concentration of public companies, the greater demand for financial information quality about these...

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Detalhes bibliográficos
Autores: Cano-Rodríguez, Manuel, Sánchez Alegría, Santiago
Formato: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2011
País:España
Recursos:Universidad de Jaén
Repositorio:RUJA. Repositorio Institucional de la Producción Científica de la Universidad de Jaén
OAI Identifier:oai:ruja.ujaen.es:10953/3368
Acesso em linha:https://hdl.handle.net/10953/3368
Access Level:acceso abierto
Palavra-chave:Audit quality
Agency problems
Big N Auditors
Private companies
Cost of debt
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spelling The value of audit quality in public and private companies: evidence from SpainCano-Rodríguez, ManuelSánchez Alegría, SantiagoAudit qualityAgency problemsBig N AuditorsPrivate companiesCost of debtThis paper compares the value of audit quality, proxied by the selection of a big N auditor, to the external claimholders of private and public companies. Although the combination of a lower ownership concentration of public companies, the greater demand for financial information quality about these companies and their higher litigation risk can result in the expectation that audit quality should be more valuable for public than for private companies, the greater information asymmetry between the managers and the external stakeholders and the unavailability of alternative mechanisms for monitoring the managers can make external audit more valuable for the external claimholders of private companies. In this paper, we test these two competing views by analysing if banks and lenders take into account auditor selection in the formation of the cost of debt. Our results support the second view: we find that only private companies obtain a lower cost of debt when they are audited by a high-quality auditor. These results are robust to both endogeneity and unobserved firm-specific heterogeneity.This research is funded by the P06-SEJ-01821 research project, of the General Secretary of Universities, Research and Technology of Andalucía and the SEJ2007-65782-C02-02ECON research project of the Spanish Ministry of Science and Education.Springer202420242011info:eu-repo/semantics/articleinfo:eu-repo/semantics/acceptedVersionapplication/pdfhttps://hdl.handle.net/10953/3368reponame:RUJA. Repositorio Institucional de la Producción Científica de la Universidad de Jaéninstname:Universidad de JaénInglésJ Manag Gov 16, 683–706 (2012)Atribución-NoComercial-SinDerivadas 3.0 Españahttp://creativecommons.org/licenses/by-nc-nd/3.0/es/info:eu-repo/semantics/openAccessoai:ruja.ujaen.es:10953/33682026-06-24T12:41:07Z
dc.title.none.fl_str_mv The value of audit quality in public and private companies: evidence from Spain
title The value of audit quality in public and private companies: evidence from Spain
spellingShingle The value of audit quality in public and private companies: evidence from Spain
Cano-Rodríguez, Manuel
Audit quality
Agency problems
Big N Auditors
Private companies
Cost of debt
title_short The value of audit quality in public and private companies: evidence from Spain
title_full The value of audit quality in public and private companies: evidence from Spain
title_fullStr The value of audit quality in public and private companies: evidence from Spain
title_full_unstemmed The value of audit quality in public and private companies: evidence from Spain
title_sort The value of audit quality in public and private companies: evidence from Spain
dc.creator.none.fl_str_mv Cano-Rodríguez, Manuel
Sánchez Alegría, Santiago
author Cano-Rodríguez, Manuel
author_facet Cano-Rodríguez, Manuel
Sánchez Alegría, Santiago
author_role author
author2 Sánchez Alegría, Santiago
author2_role author
dc.subject.none.fl_str_mv Audit quality
Agency problems
Big N Auditors
Private companies
Cost of debt
topic Audit quality
Agency problems
Big N Auditors
Private companies
Cost of debt
description This paper compares the value of audit quality, proxied by the selection of a big N auditor, to the external claimholders of private and public companies. Although the combination of a lower ownership concentration of public companies, the greater demand for financial information quality about these companies and their higher litigation risk can result in the expectation that audit quality should be more valuable for public than for private companies, the greater information asymmetry between the managers and the external stakeholders and the unavailability of alternative mechanisms for monitoring the managers can make external audit more valuable for the external claimholders of private companies. In this paper, we test these two competing views by analysing if banks and lenders take into account auditor selection in the formation of the cost of debt. Our results support the second view: we find that only private companies obtain a lower cost of debt when they are audited by a high-quality auditor. These results are robust to both endogeneity and unobserved firm-specific heterogeneity.
publishDate 2011
dc.date.none.fl_str_mv 2011
2024
2024
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/acceptedVersion
format article
status_str acceptedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/10953/3368
url https://hdl.handle.net/10953/3368
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv J Manag Gov 16, 683–706 (2012)
dc.rights.none.fl_str_mv Atribución-NoComercial-SinDerivadas 3.0 España
http://creativecommons.org/licenses/by-nc-nd/3.0/es/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Atribución-NoComercial-SinDerivadas 3.0 España
http://creativecommons.org/licenses/by-nc-nd/3.0/es/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Springer
publisher.none.fl_str_mv Springer
dc.source.none.fl_str_mv reponame:RUJA. Repositorio Institucional de la Producción Científica de la Universidad de Jaén
instname:Universidad de Jaén
instname_str Universidad de Jaén
reponame_str RUJA. Repositorio Institucional de la Producción Científica de la Universidad de Jaén
collection RUJA. Repositorio Institucional de la Producción Científica de la Universidad de Jaén
repository.name.fl_str_mv
repository.mail.fl_str_mv
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