External audit quality and firms’ credit score

Zalata A. M., Elzahar H., McLaughlin C.

Cogent Business and Management, vol.7, no.1, 2020 (ESCI, Scopus) identifier

  • Nəşrin Növü: Article / Article
  • Cild: 7 Say: 1
  • Nəşr tarixi: 2020
  • Doi nömrəsi: 10.1080/23311975.2020.1724063
  • jurnalın adı: Cogent Business and Management
  • Jurnalın baxıldığı indekslər: Emerging Sources Citation Index (ESCI), Scopus
  • Açar sözlər: audit fee, Audit quality, credit rating, industry-specialised auditors, non-audit fee
  • Açıq Arxiv Kolleksiyası: Məqalə
  • Adres: Bəli

Qısa məlumat

Using a sample of UK firms, we investigate whether external audit quality has an informational role for firms credit score. In our general research setting, we could not find any evidence on the association between firms’ credit score and external audit quality. However, when firms are suspected to be engaged in managerial misstatements, firms’ credit score seems to be associated with external audit quality. In particular, suspected firms get high credit score when they are audited by one of industry-specialised auditors. In addition, credit rating agencies penalise suspect firms when they pay high audit and non-audit fees.