showing 6 related works from this author
Audit fees and cost of debt: differences in the credibility of voluntary and mandatory audits
2019
Despite the extensive research on audit fees, few studies have examined the effect of audit fees on the cost of debt. Based on the credence goods theory, we examine whether the effect of audits on the cost of debt is affected by the type of audit (voluntary or mandatory) and the audit fees, as well as whether there is a combined effect of voluntary audits and audit fees, so that the effect of voluntary audits on the cost of debt is affected by audit fees. Using a sample of Spanish SMEs, we find an asymmetric effect of audit fees on the cost of debt: higher audit fees are associated with a lower cost of debt for voluntarily audited companies, while the association is not significant for mand…
Audit and Earnings Management in Spanish SMEs
2016
Abstract Evidence about the relation between earnings management and voluntary audits is scarce, and there is no research about the effectiveness of mandatory audits to improve earnings quality. Using a sample of Spanish SMEs, where some companies are mandatorily audited and some are exempt from audit, we examine if audits, either mandatory or voluntary, help to improve accounting quality by constraining earnings management. We also examine differences between voluntary and mandatory audits, as well as the role of Big 4 and Middle-Tier auditors. After controlling for other characteristics that affect earnings management, we find that audited companies have lower absolute discretionary accru…
Audit fees and earnings management: differences based on the type of audit
2020
In spite of the extensive research about the impact of audit fees on audit quality, there is no research examining if the association between voluntary audits and audit pricing affects audit quality. Therefore, the aim of this paper is to empirically examine whether the effect of audit fees on audit quality, measured by the level of earnings management, is affected by the type of audit (voluntary vs mandatory), as well as whether the effect of audit fees on audit quality is different depending on the type of audit. Using a sample of Spanish SMEs composed of both voluntarily and mandatorily audited companies, we find that voluntary audits have higher quality when audit fees are lower, but th…
Cost of debt capital and audit in Spanish SMEs
2014
Evidence about the effect of voluntary audits on the cost of debt is mixed, and there is no research about the effects of mandatory audits and the non-compliance with the audit requirement. Using a sample of Spanish SMEs, where some companies are exempt from audit and some are mandatorily audited, we examine if audits, either mandatory or voluntary, help to reduce the cost of debt. We do not find a significant association between voluntary audits and cost of debt, whereas companies that breach the audit requirement have a higher cost of debt than the mandatorily audited ones. This suggests that differences in the cost of debt between audited and unaudited companies are associated with a “pu…
Combined Effects of Auditing and Discretionary Accruals on the Cost of Debt: Evidence From Spanish SMEs
2021
Previous literature shows mixed evidence on the effect of discretionary accruals and auditing on the cost of debt. We hypothesize that, in the SMEs setting, auditing can act as a substitute for accruals quality, and thus audits may mitigate the effect of discretionary accruals on the cost of debt. Using a sample of Spanish SMEs, we find that auditing is negatively related with the cost of debt, while higher discretionary accruals are related with a lower cost of debt. Nonetheless, this effect is lower than that one observed for audits. When considering the combined effect of both variables, the effect of discretionary accruals is replaced by that of auditing. These results suggest that, am…
Digital transparency and Web 2.0 in Spanish city councils
2016
Abstract The purpose of this study is to provide a Web 2.0 Disclosure Index to measure the Web 2.0 presence of Spanish city councils and the information disclosed by them on these media, and to test whether the use of Web 2.0 tools and social media by local governments improve their Web 1.0 digital transparency. We have structured the Web 2.0 Index as the sum of three partial indexes, referred to presence, the content and the interactivity of the Web, and we have estimated these indexes by a content analysis of the city council's websites. We find that the use of Web 2.0 tools has an essentially ornamental focus, and thus it is necessary to increase the content disclosed, especially at the …