TThere has been debate over the economic consequences of accounting conservatism in debt contracting. We contribute to this debate by arguing that the prospect of signaling project return may give rise to the demand for conservative accounting, even though it may not improve contracting...

Source: Dissertation Abstracts International, Volume: 68-09, Section: A, page: 3933.

Conventional wisdom suggests that audit risk disclosure improves the quality of audited financial reports because the disclosure reduces information asymmetry between investors and companies. In contrast, we show that audit risk disclosure provides companies with another channel to influence...

This study investigates the effects of bias and aggregation in an accounting information system (AIS) on the creditor's rollover/foreclosure decision and a levered firm's costs of debt and equity capital. We make two innovations in modeling an AIS with bias. First, we decompose the overall...