Audit Office Size, Client Characteristics and Cost of Bank Loans.
- Resource Type
- Article
- Authors
- Hongmei Jia; Gates, Sandra
- Source
- Journal of Accounting & Finance (2158-3625). Aug2018, Vol. 18 Issue 4, p11-22. 12p.
- Subject
- *AUDITING
*BUSINESS size
*BANK loans
*AUDITORS
PROPENSITY score matching
- Language
- ISSN
- 2158-3625
This study examines the association between the size of the audit office and the cost of their clients' bank loans. The results show that the loan spread of the client is negatively associated with the size of the audit office after controlling all other known loan characteristics and client characteristics. After using Propensity-Score Matching, the negative association disappears, and the results suggest that the difference in the cost of bank loans among the different size of audit offices is largely related to client characteristics. This study provides further evidence about the relationship between auditors and client bank loans. [ABSTRACT FROM AUTHOR]