This study investigates the role of public debt financing in shaping accounting conservatism in privately held … initial bonds, and that bond investors reward this long-term commitment to conservative accounting by gradually reducing …

We examine whether initial loan sales in the secondary loan market relate to borrowing firms' accounting conservatism …. We find that borrowing firms exhibit a significant decline in accounting conservatism after the initial loan sales. We … accounting conservatism is enforced in the private debt market, and that lead lenders play a more prominent role than secondary …