---
_id: '4035'
abstract:
- lang: eng
  text: We examine whether the mandated introduction of International Financial Reporting
    Standards (IFRS) is associated with the propensity to access the public rather
    than private debt market and the cost of debt. We use a global sample of public
    bonds and private loans and find that mandatory IFRS adopters are more likely,
    post-IFRS, to issue bonds than to borrow privately. We also find that mandatory
    IFRS adopters pay lower bond yield spreads, but not lower loan spreads, after
    the mandate. These findings are consistent with debt providers responding positively
    to financial reporting of higher quality and comparability, but only when there
    is a greater reliance on publicly available financial statements than private
    communication. Lastly, we document that the observed debt market benefits are
    concentrated in countries with larger differences between domestic GAAP and IFRS
    and are present even for EU countries that did not experience concurrent financial
    reporting enforcement or other institutional reforms. Overall, our study documents
    positive economic consequences around the mandated IFRS adoption for corporate
    debt financing and, in particular, for bond financing.
author:
- first_name: Annita
  full_name: Florou, Annita
  last_name: Florou
- first_name: Urska
  full_name: Kosi, Urska
  id: '54068'
  last_name: Kosi
  orcid: 0009-0009-2545-5929
citation:
  ama: Florou A, Kosi U. Does mandatory IFRS adoption facilitate debt financing? <i>Review
    of Accounting Studies</i>. 2015;20(4):1407-1456. doi:<a href="https://doi.org/10.1007/s11142-015-9325-z">10.1007/s11142-015-9325-z</a>
  apa: Florou, A., &#38; Kosi, U. (2015). Does mandatory IFRS adoption facilitate
    debt financing? <i>Review of Accounting Studies</i>, <i>20</i>(4), 1407–1456.
    <a href="https://doi.org/10.1007/s11142-015-9325-z">https://doi.org/10.1007/s11142-015-9325-z</a>
  bibtex: '@article{Florou_Kosi_2015, title={Does mandatory IFRS adoption facilitate
    debt financing?}, volume={20}, DOI={<a href="https://doi.org/10.1007/s11142-015-9325-z">10.1007/s11142-015-9325-z</a>},
    number={4}, journal={Review of Accounting Studies}, author={Florou, Annita and
    Kosi, Urska}, year={2015}, pages={1407–1456} }'
  chicago: 'Florou, Annita, and Urska Kosi. “Does Mandatory IFRS Adoption Facilitate
    Debt Financing?” <i>Review of Accounting Studies</i> 20, no. 4 (2015): 1407–56.
    <a href="https://doi.org/10.1007/s11142-015-9325-z">https://doi.org/10.1007/s11142-015-9325-z</a>.'
  ieee: 'A. Florou and U. Kosi, “Does mandatory IFRS adoption facilitate debt financing?,”
    <i>Review of Accounting Studies</i>, vol. 20, no. 4, pp. 1407–1456, 2015, doi:
    <a href="https://doi.org/10.1007/s11142-015-9325-z">10.1007/s11142-015-9325-z</a>.'
  mla: Florou, Annita, and Urska Kosi. “Does Mandatory IFRS Adoption Facilitate Debt
    Financing?” <i>Review of Accounting Studies</i>, vol. 20, no. 4, 2015, pp. 1407–56,
    doi:<a href="https://doi.org/10.1007/s11142-015-9325-z">10.1007/s11142-015-9325-z</a>.
  short: A. Florou, U. Kosi, Review of Accounting Studies 20 (2015) 1407–1456.
date_created: 2018-08-22T07:47:41Z
date_updated: 2026-06-15T09:39:29Z
department:
- _id: '551'
- _id: '635'
- _id: '186'
doi: 10.1007/s11142-015-9325-z
extern: '1'
intvolume: '        20'
issue: '4'
jel:
- G15
- K22
- M41
- M48
keyword:
- Accounting regulation
- IFRS
- Accounting quality
- Public and private debt markets
- Cost of debt
language:
- iso: eng
page: 1407-1456
publication: Review of Accounting Studies
publication_identifier:
  eissn:
  - 1573-7136
publication_status: published
status: public
title: Does mandatory IFRS adoption facilitate debt financing?
type: journal_article
user_id: '54068'
volume: 20
year: '2015'
...
---
_id: '37109'
abstract:
- lang: eng
  text: This study examines the effect of audit on private firms’ cost of debt. We
    use a sample of 1,949 small private firms operating in the period 2006-2010 with
    optional financial statement audit. High quality data allows us to construct a
    more precise interest rate measure than existing studies employ. After controlling
    for obvious sources of demand for voluntary audits (ownership complexity, subsidiary
    status, bank relations), we find a robust central result that voluntary audits
    increase rather than decrease the cost of debt financing, contrary to several
    existing studies. This finding indicates that voluntary audits are generally treated
    as “adopting a label” and penalised by creditors, regardless of the perceived
    auditor quality as a result of the lemon problem in the audit market. Even Big-4
    audits increase the cost of debt, likely as a result due to the lemon problem
    in the audit market, although the increase is smaller than for non-Big-4 audits.
    The results are sensitive to the estimation method used (OLS, Heckman’s two-step,
    PSM) and (sub-)sample selection. We show that disregarding the underlying assumptions
    of these estimation methods may lead to incorrect inferences. Additional analyses
    show that audited firms’ reported earnings are less informative about future operating
    performance than earnings of their unaudited counterparts. Our results also indicate
    that results are sensitive to cost of debt definition and this might have affected
    the results reported in the existing literature.
author:
- first_name: Urska
  full_name: Kosi, Urska
  id: '54068'
  last_name: Kosi
- first_name: Jerney
  full_name: Koren, Jerney
  last_name: Koren
- first_name: Aljosa
  full_name: Valentincic, Aljosa
  last_name: Valentincic
citation:
  ama: 'Kosi U, Koren J, Valentincic A. Does Financial Statement Audit Reduce the
    Cost of Debt of Private Firms? In: ; 2013.'
  apa: Kosi, U., Koren, J., &#38; Valentincic, A. (2013). <i>Does Financial Statement
    Audit Reduce the Cost of Debt of Private Firms?</i> 36th Annual Congress of European
    Accounting Association, Paris, France.
  bibtex: '@inproceedings{Kosi_Koren_Valentincic_2013, title={Does Financial Statement
    Audit Reduce the Cost of Debt of Private Firms?}, author={Kosi, Urska and Koren,
    Jerney and Valentincic, Aljosa}, year={2013} }'
  chicago: Kosi, Urska, Jerney Koren, and Aljosa Valentincic. “Does Financial Statement
    Audit Reduce the Cost of Debt of Private Firms?,” 2013.
  ieee: U. Kosi, J. Koren, and A. Valentincic, “Does Financial Statement Audit Reduce
    the Cost of Debt of Private Firms?,” presented at the 36th Annual Congress of
    European Accounting Association, Paris, France, 2013.
  mla: Kosi, Urska, et al. <i>Does Financial Statement Audit Reduce the Cost of Debt
    of Private Firms?</i> 2013.
  short: 'U. Kosi, J. Koren, A. Valentincic, in: 2013.'
conference:
  end_date: 2013-05-05
  location: Paris, France
  name: 36th Annual Congress of European Accounting Association
  start_date: 2013-05-02
date_created: 2023-01-17T13:25:30Z
date_updated: 2023-01-17T13:51:24Z
department:
- _id: '635'
- _id: '186'
- _id: '551'
extern: '1'
keyword:
- private firms
- voluntary audit
- cost of debt
- self-selection bias
- lemon problem
language:
- iso: eng
main_file_link:
- url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2373987
status: public
title: Does Financial Statement Audit Reduce the Cost of Debt of Private Firms?
type: conference
user_id: '88603'
year: '2013'
...