---
_id: '65894'
abstract:
- lang: eng
  text: We examine the relation between voluntary audit and the cost of debt in private
    firms. We use a sample of 7420 small private firms operating in the period 2006-2022
    that are not subject to mandatory audits. Firms self-select into voluntary audits
    because of the economic setting (e.g., ownership complexity, export, subsidiary
    status) or because firm fundamentals limit their access to financial debt. In
    the outcome analyses, we find that voluntary audits result in higher, rather than
    lower, interest rates with increases ranging from approximately 1.7 percentage
    points, but going higher depending on the exact specification. This effect is
    present regardless of the perceived audit quality (Big-4 vs. non-Big-4), consistent
    across auditor types. Audited firms’ earnings are less informative about future
    operating performance. Voluntary audits facilitate access to financial debt for
    high-risk firms. The price paid is reflected in higher interest rates for voluntary
    audits – firms with higher information/fundamental risk.
article_number: '105474'
author:
- first_name: Riste
  full_name: Ichev, Riste
  last_name: Ichev
- first_name: Jernej
  full_name: Koren, Jernej
  last_name: Koren
- first_name: Urska
  full_name: Kosi, Urska
  last_name: Kosi
- first_name: Katarina
  full_name: Sitar Sustar, Katarina
  last_name: Sitar Sustar
- first_name: Aljosa
  full_name: Valentincic, Aljosa
  last_name: Valentincic
citation:
  ama: 'Ichev R, Koren J, Kosi U, Sitar Sustar K, Valentincic A. Cost of debt for
    private firms revisited: voluntary audits as a reflection of risk. <i>International
    Review of Economics &#38; Finance</i>. 2026;109. doi:<a href="https://doi.org/10.1016/j.iref.2026.105474">10.1016/j.iref.2026.105474</a>'
  apa: 'Ichev, R., Koren, J., Kosi, U., Sitar Sustar, K., &#38; Valentincic, A. (2026).
    Cost of debt for private firms revisited: voluntary audits as a reflection of
    risk. <i>International Review of Economics &#38; Finance</i>, <i>109</i>, Article
    105474. <a href="https://doi.org/10.1016/j.iref.2026.105474">https://doi.org/10.1016/j.iref.2026.105474</a>'
  bibtex: '@article{Ichev_Koren_Kosi_Sitar Sustar_Valentincic_2026, title={Cost of
    debt for private firms revisited: voluntary audits as a reflection of risk}, volume={109},
    DOI={<a href="https://doi.org/10.1016/j.iref.2026.105474">10.1016/j.iref.2026.105474</a>},
    number={105474}, journal={International Review of Economics &#38; Finance}, publisher={Elsevier
    }, author={Ichev, Riste and Koren, Jernej and Kosi, Urska and Sitar Sustar, Katarina
    and Valentincic, Aljosa}, year={2026} }'
  chicago: 'Ichev, Riste, Jernej Koren, Urska Kosi, Katarina Sitar Sustar, and Aljosa
    Valentincic. “Cost of Debt for Private Firms Revisited: Voluntary Audits as a
    Reflection of Risk.” <i>International Review of Economics &#38; Finance</i> 109
    (2026). <a href="https://doi.org/10.1016/j.iref.2026.105474">https://doi.org/10.1016/j.iref.2026.105474</a>.'
  ieee: 'R. Ichev, J. Koren, U. Kosi, K. Sitar Sustar, and A. Valentincic, “Cost of
    debt for private firms revisited: voluntary audits as a reflection of risk,” <i>International
    Review of Economics &#38; Finance</i>, vol. 109, Art. no. 105474, 2026, doi: <a
    href="https://doi.org/10.1016/j.iref.2026.105474">10.1016/j.iref.2026.105474</a>.'
  mla: 'Ichev, Riste, et al. “Cost of Debt for Private Firms Revisited: Voluntary
    Audits as a Reflection of Risk.” <i>International Review of Economics &#38; Finance</i>,
    vol. 109, 105474, Elsevier , 2026, doi:<a href="https://doi.org/10.1016/j.iref.2026.105474">10.1016/j.iref.2026.105474</a>.'
  short: R. Ichev, J. Koren, U. Kosi, K. Sitar Sustar, A. Valentincic, International
    Review of Economics &#38; Finance 109 (2026).
date_created: 2026-06-15T10:26:04Z
date_updated: 2026-06-22T11:37:47Z
department:
- _id: '186'
- _id: '551'
- _id: '635'
doi: 10.1016/j.iref.2026.105474
intvolume: '       109'
language:
- iso: eng
main_file_link:
- open_access: '1'
  url: https://doi.org/10.1016/j.iref.2026.105474
oa: '1'
publication: International Review of Economics & Finance
publication_identifier:
  issn:
  - 1059-0560
publication_status: published
publisher: 'Elsevier '
status: public
title: 'Cost of debt for private firms revisited: voluntary audits as a reflection
  of risk'
type: journal_article
user_id: '54068'
volume: 109
year: '2026'
...