Information content and recency effect of the audit report in loan rating decisions

Andrés Guiral-Contreras; Jose A. Gonzalo-Angulo; Waymond Rodgers

doi:10.1111/j.1467-629X.2006.00208.x

Information content and recency effect of the audit report in loan rating decisions

Andrés Guiral-Contreras, Jose A. Gonzalo-Angulo, Waymond Rodgers

Department of Business Administration

Research output: Contribution to journal › Article › peer-review

35 Citations (Scopus)

Abstract

We examined the significance of the audit report in loan rating decisions using the belief revision model. We designed a laboratory experiment where the sign of the audit report is mixed with other annual financial information in a series of sequential evidence. The results of an experimental design, using 106 loan officers from international financial institutions, support the hypothesis that the qualified audit report appears to be an independent and useful piece of evidence when it is contrary to favourable financial expectations. Our findings also support that the 'recency effect' might influence international commercial loan officers' perception of the qualified audit report.

Original language	English
Pages (from-to)	285-304
Number of pages	20
Journal	Accounting and Finance
Volume	47
Issue number	2
DOIs	https://doi.org/10.1111/j.1467-629X.2006.00208.x
Publication status	Published - 2007 Jun

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics, Econometrics and Finance (miscellaneous)

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Information content and recency effect of the audit report in loan rating decisions

Abstract

All Science Journal Classification (ASJC) codes

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