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

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

Research output: Contribution to journalArticle

30 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 languageEnglish
Pages (from-to)285-304
Number of pages20
JournalAccounting and Finance
Volume47
Issue number2
DOIs
Publication statusPublished - 2007 Jun 1

Fingerprint

Audit reports
Information content
Rating
Recency
Loans
Qualified audit reports
Financial information
Laboratory experiments
Experimental design
International financial institutions
Belief revision

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)

Cite this

Guiral-Contreras, Andrés ; Gonzalo-Angulo, Jose A. ; Rodgers, Waymond. / Information content and recency effect of the audit report in loan rating decisions. In: Accounting and Finance. 2007 ; Vol. 47, No. 2. pp. 285-304.
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Information content and recency effect of the audit report in loan rating decisions. / Guiral-Contreras, Andrés; Gonzalo-Angulo, Jose A.; Rodgers, Waymond.

In: Accounting and Finance, Vol. 47, No. 2, 01.06.2007, p. 285-304.

Research output: Contribution to journalArticle

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