Do Creditors Care about the Signing Auditors'Experience?——Evidence from the perspective of cost of debt
Using the data of Chinese A-share listed nonfinancial companies,this paper studies the relationship between the experience of signing auditors and a firm's cost of debt(COD).The experience of signing auditors is measured by the cumulative number of audit reports an auditor has issued until the current year.The results show that the experience of signing auditors is negatively associated with COD,indicating that creditors will consider the experience of the signing auditors who audit the financial statements of the debtor and give preferential treatment to companies audited by experienced signing auditors in debt pricing.Mechanistic tests suggest that the personal experience of the signing auditors improves the quality of their client's accounting information,which in turn helps to reduce COD.The association,originating mainly from industry experience,is only significant in the context with high degree of business complexity and information asymmetry.This paper provides empirical evidence of the economic consequences of the signing auditors'experience from the creditor's perspective,and it also enriches the literature on the relationship between the individual auditor's experience and debt financing.
signing auditor's experienceaudit qualitycredit riskcost of debt
NETL
NSTL
万方数据
