TY - JOUR
T1 - External audit quality and firms' credit score
AU - Zalata, Alaa Mansour
AU - Elzahar, Hany
AU - McLaughlin, Craig
PY - 2020/2/13
Y1 - 2020/2/13
N2 - 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.
AB - 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.
KW - audit fee
KW - audit quality
KW - credit rating
KW - industry-specialised auditors
KW - non-audit fee
UR - http://www.scopus.com/inward/record.url?scp=85079716251&partnerID=8YFLogxK
U2 - 10.1080/23311975.2020.1724063
DO - 10.1080/23311975.2020.1724063
M3 - Article
AN - SCOPUS:85079716251
SN - 2331-1975
VL - 7
JO - Cogent Business and Management
JF - Cogent Business and Management
IS - 1
M1 - 1724063
ER -