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| Tekijä: | Amir, E. Guan, Y. Livne, G. |
| Otsikko: | Auditor independence and the cost of capital before and after Sarbanes-Oxley: The case of newly issued public debt |
| Lehti: | European Accounting Review
2010 : VOL. 19:4, p. 633-664 |
| Asiasana: | capital budgeting capital costs capital investment debt legislation accounting auditing |
| Kieli: | eng |
| Tiivistelmä: | An important Sarbanes-Oxley Act (SOX) aim is to reduce the cost of capital (hereafter as: c-of-cap.) by enhancing auditor independence (herein as: a-ind). This study provides evidence suggesting that a-ind. has increased following the SOX. Though herein an inverse relationship is posited btw. a-ind. and c-of-cap., it is an open question whether this relationship has got stronger or weaker following the SOX. It is uncovered by examination of this relationship that a-ind. is more strongly related to bond rating and bond yield premium in the post-SOX period relative to the period before the SOX. Thus, greater price sensitivity of corporate debt to the level of a-ind. following the SOX is suggested. |
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