Purpose Taking into account that debtholders bear most of the risks in the case of failure (Jensen and Meckling, 1976), earnings quality is valuable for debtholder decision makers as a monitoring mechanism and as a signal of credibility that reduces information asymmetries. In this sense, this...

This paper addresses the relevance of auditor's opinion and auditor's reputation for the creditors of private companies in an environment of low demand for audit quality. By employing archival data from private Spanish firms, we find that Big-4 auditors' clients bear a lower cost of debt,...

This paper considers whether the existing measures of credit risk order and quantify corporate credit risk in the same way. Eight measures of credit risk of different natures are compared: Altman's Z, Ohlson's O, Hannan and Hanweck model, Zmijewski model, bond spreads, CDS spreads,...