- Title
- Being private, big 4 auditors, and debt raising
- Creator
- Sharpe, Wen; Carey, Peter; Zhang, Hong
- Date
- 2023
- Type
- Text; Journal article
- Identifier
- http://researchonline.federation.edu.au/vital/access/HandleResolver/1959.17/196582
- Identifier
- vital:18734
- Identifier
-
https://doi.org/10.1111/acfi.12969
- Identifier
- ISSN:0810-5391 (ISSN)
- Abstract
- This study investigates the role of auditor choice (Big 4/Non-Big 4) in debt financing for private and public firms. We find private firms have less access to debt than public firms, and Big 4 auditors support debt raising in both private and public firms. Consistent with private firms facing greater information asymmetry, Big 4 auditors are more important for debt raising in private firms than in public firms. The benefit of appointing Big 4 auditors for private firms' debt raising is greater in the opaque information environment of the global financial crisis. It is also greater when firms are smaller, younger, or have poorer financial reporting quality. We also find evidence consistent with Big 4 auditors mitigating agency conflicts and enhancing debt raising when ownership concentration is higher in private firms. © 2022 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand.
- Publisher
- John Wiley and Sons Inc
- Relation
- Accounting and Finance Vol. 63, no. 2 (2023), p. 2295-2345
- Rights
- All metadata describing materials held in, or linked to, the repository is freely available under a CC0 licence
- Rights
- https://creativecommons.org/licenses/by-nc-nd/4.0/
- Rights
- Copyright © 2022 The Authors
- Rights
- Open Access
- Subject
- 3501 Accounting, auditing and accountability; 3502 Banking, finance and investment; 3801 Applied economics; Auditor choice; Debt raising; Information asymmetry; Private firms; Public firms
- Full Text
- Reviewed
- Funder
- We also gratefully acknowledge the helpful comments provided by Ferdinand Gul, and participants at EAA, AFAANZ, Deakin University, and Swinburne University of Technology. Open access funding enabled by Federation University Australia
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