Municipal accounting information is widely believed to be useful to creditors in assessing bond default risk (e.g., Wallace 1985; Wilson and Howard 1985). Users of accounting information perceive that Big 8 auditors provide higher quality audits both for corporations (Shockley and Holt 1983; McKinley et...

Using a large data sample of 58,562 new municipal issues covering the period from 1984 to 2002, we examine whether the quality of advice provided by a financial advisor affects new issue interest costs. We find that higher-quality financial advisors are associated with statistically significant...