In the syndicated loan market, potential accounting errors exacerbate credit risk and asymmetric information problems. The purpose of financial statement audits is to provide reasonable assurance that accounting records are free from material errors. In this paper, we examine whether an increase...

In this paper I analyze whether banks recognize problem loans loans with substandard and doubtful regulatory risk classifications in a timely manner. I argue that this is important to understand because substandard and doubtful rated loans are loans that should be evaluated for loan loss...