Evidence about the effect of voluntary audits on the cost of debt is mixed, and there is no research about the effects of mandatory audits and the non-compliance with the audit requirement. Using a sample of Spanish SMEs, where some companies are exempt from audit and some are mandatorily...

We examine how executive equity risk-taking incentives affect firms' choice of debt structure. Using a longitudinal sample of U.S. firms, we document that when executive compensation is more sensitive to stock volatility (i.e., has higher vega), firms reduce their reliance on bank debt...

Previous studies show that, in common-law countries, the explanatory power of stock returns is higher using cash flows than earnings and accruals, while the opposite is true in code-law countries. Moreover, the literature has shown the existence of a country-specific effect motivated by...

This study examines the role of earnings management in the relationship between firm performance and capital structure, dividing earnings management into discretionary and nondiscretionary accruals to test established theories on the capital structure. Using data on 802 companies in the member...

This paper investigates the effect of external financing on earnings management in Vietnam, a bank-dominated economy. Using a sample of 494 listed non-financial firms from 2009 to 2018, we find that external financing is positively related to earnings management, implying that firms have...