Modified audit opinions and debt contracting: evidence from China

References

• Amin, K., J. Krishnan, and J. S. Yang. 2014. “Going Concern Opinion and Cost of Equity.” Auditing: A Journal of Practice & Theory 33 (4): 1–39. doi:10.2308/ajpt-50827.
   Web of Science ®Google Scholar
• Bai, C. E., J. Lu, and Z. Tao. 2006. “Property Rights Protection and Access to Bank Loans.” Economics of Transition 14 (44): 611–628. doi:10.1111/j.1468-0351.2006.00269.x.
   Google Scholar
• Bamber, E. M., and R. A. Stratton. 1997. “The Information Content of the Uncertainty-Modified Audit Report: Evidence from Bank Loan Officers.” Accounting Horizons 11 (2): 1–11.
   Google Scholar
• Bessell, M., A. Anandarajan, and A. Umar. 2003. “Information Content, Audit Reports and Going‐Concern: An Australian Study.” Accounting & Finance 43 (3): 261–282. doi:10.1111/acfi.2003.43.issue-3.
   Google Scholar
• Blackwell, D. W., T. R. Noland, and D. B. Winters. 1998. “The Value of Auditor Assurance: Evidence from Loan Pricing.” Journal of Accounting Research 36 (1): 57–70. doi:10.2307/2491320.
   Web of Science ®Google Scholar
• Brandt, L., and H. Li. 2003. “Bank Discrimination in Transition Economies: Ideology, Information, or Incentives?” Journal of Comparative Economics 31 (33): 387–413. doi:10.1016/S0147-5967(03)00080-5.
   Google Scholar
• Chen, C. J. P., C. Shimin, and S. Xijia. 2001. “Profitability Regulation, Earnings Management, and Modified Audit Opinions: Evidence from China.” Auditing: A Journal of Practice & Theory 20 (2): 9–30. doi:10.2308/aud.2001.20.2.9.
   Web of Science ®Google Scholar
• Chen, J., R. Ding, W. Hou, and S. Johan. 2016. “Do Financial Analysts Perform a Monitoring Role in China? Evidence from Modified Audit Opinion.” ABACUS A Journal of Accounting, Finance and Business Studies 52 (3): 473–500.
   Web of Science ®Google Scholar
• Chen, P. C. 2016. “Banks’ Acquisition of Private Information about Financial Misreporting.” The Accounting Review 91 (3): 835–857. doi:10.2308/accr-51222.
   Web of Science ®Google Scholar
• Chen, P. F., S. He, Z. Ma, and D. Stice. 2016. “The Information Role of Audit Opinions in Debt Contracting.” Journal of Accounting and Economics 61 (1): 121–144. doi:10.1016/j.jacceco.2015.04.002.
   Web of Science ®Google Scholar
• Cheng, L., and Z. Lei. 2015. “Does the Expansion of Chinese State-Owned Enterprises Affect the Innovative Behavior of Private Enterprises?” Asia-Pacific Journal of Accounting & Economics 22 (1): 24–54. doi:10.1080/16081625.2015.1010269.
   Web of Science ®Google Scholar
• Cheng, S. 2001. Chinese Economic Reform and Development Studies. Beijing: China Renmin University Press (in Chinese).
   Google Scholar
• Clogg, C. C., E. Petkova, and A. Haritou. 1995. “Statistical Methods for Comparing Regression Coefficients between Models.” American Journal of Sociology 100 (5): 1261–1293. doi:10.1086/230638.
   Web of Science ®Google Scholar
• Costello, A. M. W. 2011. “The Impact of Financial Reporting Quality on Debt Contracting: Evidence from Internal Control Weakness Reports.” Journal of Accounting Research 49 (1): 97–136. doi:10.1111/j.1475-679X.2010.00388.x.
   Web of Science ®Google Scholar
• Cull, R., and L. Xu. 2005. “Institutions, Ownership, and Finance: The Determinants of Profit Reinvestment among Chinese Firms.” Journal of Financial Economics 77 (1): 117–146. doi:10.1016/j.jfineco.2004.05.010.
   Web of Science ®Google Scholar
• Cullinan, C. P., F. Wang, and B. Yang. 2012. “Audit Opinion Improvement and the Timing of Disclosure.” Advances in Accounting 28 (2): 333–343. doi:10.1016/j.adiac.2012.09.010.
   Google Scholar
• Czerney, K., J. J. Schmidt, and A. M. Thompson. 2014. “Does Auditor Explanatory Language in Unqualified Audit Reports Indicate Increased Financial Misstatement Risk?” The Accounting Review 89 (6): 2115–2149. doi:10.2308/accr-50836.
   Web of Science ®Google Scholar
• Ding, S., M. Liu, and Z. Wu. 2016. “Financial Reporting Quality and External Debt Financing Constraints: The Case of Privately Held Firm.” ABACUS: A Journal of Accounting, Finance and Business Studies 52 (3): 351–373. doi:10.1111/abac.12083.
   Web of Science ®Google Scholar
• Dye, R. A. 1993. “Auditing Standards, Legal Liability, and Auditor Wealth.” Journal of Political Economy 101 (5): 887–914. doi:10.1086/261908.
   Web of Science ®Google Scholar
• Estes, R., and M. Reimer. 1977. “A Study of the Effect of Qualified Auditors ‘Opinions on Bankers’ Lending Decisions.” Accounting and Business Research 7 (28): 250–259. doi:10.1080/00014788.1977.9728713.
   Google Scholar
• Faccio, M. 2006. “Politically Connected Firms.” The American Economic Review 96 (1): 369–386. doi:10.1257/000282806776157704.
   Web of Science ®Google Scholar
• Firth, M. 1979. “Qualified Audit Reports and Bank Lending Decisions.” Journal Of Bank Research 9 (4): 237–241.
   Google Scholar
• Gao, L., Y. Dai, and J. Zhang. 2010. “Do Audit Practices Affect the Bank Lending Policies?” Financing Research 5 (1): 191–206. in Chinese.
   Google Scholar
• Geiger, M. A., and D. V. Rama. 2006. “Audit Firm Size and Going-Concern Reporting Accuracy.” Accounting Horizons 20 (1): 1–17. doi:10.2308/acch.2006.20.1.1.
   Google Scholar
• Gómez-Guillamón, A. D. 2003. “The Usefulness of the Audit Report in Investment and Financing Decisions.” Managerial Auditing Journal 18 (6/7): 549–559. doi:10.1108/02686900310482687.
   Google Scholar
• Gong, Q., O. Z. Li, Y. Lin, and L. Wu. 2016. “On The Benefits Of Audit Market Consolidation: Evidence from Merged Audit Firms.” The Accounting Review 91 (2): 463–488. doi: 10.2308/accr-51236.
   Web of Science ®Google Scholar
• Graham, J. R., S. Li, and J. Qui. 2008. “Corporate Misreporting and Bank Loan Contracting.” Journal of Financial Economics 89 (1): 44–81. doi:10.1016/j.jfineco.2007.08.005.
   Web of Science ®Google Scholar
• Guiral-Contreras, A., J. A. Gonzalo-Angulo, and W. Rodgers. 2007. “Information Content and Recency Effect of the Audit Report in Loan Rating Decisions.” Accounting & Finance 47 (2): 285–304. doi:10.1111/j.1467-629X.2006.00208.x.
   Web of Science ®Google Scholar
• Gulf, F. A. 1987. “The Effects of Uncertainty Reporting on Lending Officers’ Perceptions of Risk and Additional Information Required.” ABACUS: A Journal of Accounting, Finance and Business Research 23 (2): 172–179. doi:10.1111/j.1467-6281.1987.tb00148.x.
   Google Scholar
• Habib, A. 2013. “A Meta-Analysis of the Determinants of Modified Audit Opinion Decisions.” Managerial Auditing Journal 28 (3): 184–216. doi:10.1108/02686901311304349.
   Google Scholar
• Jaffee, D. 2003. “The Interest Rate Risk of Fannie Mae and Freddie Mac.” Journal of Financial Services Research 24 (1): 5–29. doi:10.1023/A:1025968716887.
   Google Scholar
• Jiang, W., and B. Li. 2006. “Institutional Environment, Government Intervention and Lending Discrimination.” Journal of Financial Research 11 (11): 116–126.
   Google Scholar
• Khan, S. A., L. Gerald, and T. N. Emeka. 2017. “Public Re-Release of Going-Concern Opinions and Market Reaction.” Accounting and Business Research 47 (3): 237–267. doi:10.1080/00014788.2016.1255586.
   Web of Science ®Google Scholar
• Kim, J., B. Y. Song, and L. Zhang. 2011. “Internal Control Weakness and Bank Loan Contracting: Evidence from SOX Section 404 Disclosures.” The Accounting Review 86 (4): 1157–1188. doi:10.2308/accr-10036.
   Web of Science ®Google Scholar
• Lennox, C., X. Wu, and T. Zhang. 2016. “The Effect of Audit Adjustments on Earnings Quality: Evidence from China.” Journal of Accounting and Economics 61 (2–3): 545–562. doi:10.1016/j.jacceco.2015.08.003.
   Web of Science ®Google Scholar
• Li, S., and X. Wu. 2004. “The Improvement in Audit Opinion and Voluntary Auditor Switch: Descriptive Statistics and Implications from 1997-2003.” Auditing Research 5 (2): 13–19. in Chinese.
   Google Scholar
• Liao, Y. G., L. Zhang, and S. Xie. 2010. “Institutional Environment, Independent Audit and the Bank Loans.” Auditing Research 2 (1): 62–69. in Chinese.
   Google Scholar
• Liu, B., C. P. Cullinan, F. Wang, and J. Zhang. 2016. “Loan Guarantees and the Cost of Debt: Evidence from China.” Applied Economics 48 (38): 3626–3643. doi:10.1080/00036846.2016.1142658.
   Web of Science ®Google Scholar
• Menon, K., and D. D. Williams. 2016. “Audit Report Restrictions in Debt Covenants.” Contemporary Accounting Research 33 (2): 682–717. doi:10.1111/care.2016.33.issue-2.
   Web of Science ®Google Scholar
• Minnis, M. 2011. “The Value of Financial Statement Verification in Debt Financing: Evidence from Private US Firms.” Journal of Accounting Research 49 (2): 457–506. doi:10.1111/joar.2011.49.issue-2.
   Web of Science ®Google Scholar
• Pei, D., and P. A. Hamill. 2013. “Do Modified Audit Opinions for Shanghai Listed Firms Convey Heterogeneous Information?” Journal of International Accounting, Auditing and Taxation 22 (1): 1. doi:10.1016/j.intaccaudtax.2013.02.004.
   Google Scholar
• Pittman, J. A., and S. Fortin. 2004. “Auditor Choice and The Cost Of Debt Capital for Newly Public Firms.” Journal Of Accounting and Economics 37 (1): 113-136. doi:10.1016/j.jacceco.2003.06.005.
   Web of Science ®Google Scholar
• Poncet, S., W. Steingress, and H. Vandenbussche. 2010. “Financial Constraints in China: Firm-Level Evidence.” China Economic Review 21 (3): 411–422. doi:10.1016/j.chieco.2010.03.001.
   Web of Science ®Google Scholar
• Schneider, A., and B. K. Church. 2008. “The Effect of Auditors’ Internal Control Opinions on Loan Decisions.” Journal of Accounting and Public Policy 27 (1): 1–18. doi:10.1016/j.jaccpubpol.2007.11.004.
   Web of Science ®Google Scholar
• Securities and Exchange Commission. 2017. Division of Corporate Finance: Financial Reporting Manual https://www.sec.gov/divisions/corpfin/cffinancialreportingmanual.pdf
   Google Scholar
• Shivakumar, L. 2013. “The Role of Financial Reporting in Debt Contracting and in Stewardship.” Accounting and Business Research 43 (4): 362–383. doi:10.1080/00014788.2013.785683.
   Web of Science ®Google Scholar
• Shu, P. G., T. K. Chen, and W. J. Hung. 2015. “Audit Duration Quality and Client Credit Risk.” Asia-Pacific Journal of Accounting & Economics 22 (2): 137–162. doi:10.1080/16081625.2014.981936.
   Web of Science ®Google Scholar
• Sun, Z., Z. Li, and J. Wang. 2006. “Government Ownership, Accounting, Information and Debt Contract.” Management World 10 (1): 100–107. in Chinese.
   Google Scholar
• Wang, Q., T. J. Wong, and L. Xia. 2008. “State Ownership, the Institutional Environment, and Auditor Choice: Evidence from China.” Journal of Accounting and Economics 46 (1): 112–134. doi:10.1016/j.jacceco.2008.04.001.
   Web of Science ®Google Scholar
• Watts, R. L., and J. L. Zimmerman. 1986. Positive Accounting Theory. Englewood Cliffs, NJ: Prentice Hall.
   Google Scholar
• Zhou, W. 2009. “Bank Financing in China’s Private Sector: The Payoffs of Political Capital.” World Development 37 (4): 787–799. doi:10.1016/j.worlddev.2008.07.011.
   Web of Science ®Google Scholar