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 | |
| Publication status | Published - 2007 Jun |
All Science Journal Classification (ASJC) codes
- Accounting
- Finance
- Economics, Econometrics and Finance (miscellaneous)
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Cite this
Guiral-Contreras, A., Gonzalo-Angulo, J. A., & Rodgers, W. (2007). Information content and recency effect of the audit report in loan rating decisions. Accounting and Finance, 47(2), 285-304. https://doi.org/10.1111/j.1467-629X.2006.00208.x