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El objetivo del presente estudio es buscar patrones en el comportamiento descriptivo del Estado d... more El objetivo del presente estudio es buscar patrones en el comportamiento descriptivo del Estado de Flujos de Tesorería según las etapas del ciclo de vida de la empresa. Partiendo de las 4 etapas clásicas (introducción, crecimiento, madurez y declive) se contrastan hipótesis relacionadas con signos, correlaciones devengo-tesorería e importancia relativa de cada uno de los tres componentes del Estado. El

European Accounting Review, 2008

This study examines the relationship between earnings management and auditor behaviour in the pre... more This study examines the relationship between earnings management and auditor behaviour in the pre-bankrupt client segment of the Spanish audit market. As proxies for auditor behaviour, we use type of audit firm (Big N/non-Big N) and type of audit report. In contrast to the USA, audit reports in Spain often include modifications other than a going-concern opinion. This allows us to study the relationship in more detail than is possible with US data. The results of our study show that discretionary accruals are negatively related to going-concern opinions but are positively related to reports modified for reasons other than going-concern problems. However, unlike Butler et al. (Journal of Accounting and Economics, 37, pp. 139–165, 2004) the negative relationship is explained not by liquidity survival tactics but by auditor conservatism. We find this conservatism not only in the value of discretionary accruals but also in the qualifications that accompany a going concern. In these cases GAAP violations have a much greater income effect and a stronger relationship with the reversal of manipulation accumulated over the years than with the manipulation introduced during the last year. Finally, our results suggest that Big N differentiation in a code-law country is context-specific and depends on the business risk parameter of the ‘audit risk model’. In particular, for high-risk firms, Big N auditors show a significantly lower level of discretionary accruals and a greater propensity to issue a going-concern opinion.

Spanish Journal of Finance and Accounting / Revista Española de Financiación y Contabilidad, 2012

ABSTRACT El presente trabajo analiza el fenómeno de la profecía autocumplida en el contexto españ... more ABSTRACT El presente trabajo analiza el fenómeno de la profecía autocumplida en el contexto español, ya que reúne condiciones idóneas para su generación. Ante la posibilidad de que la reacción del usuario ante una salvedad al principio de empresa en funcionamiento no sea uniforme, se ha introducido un elemento de interacción que separa las salvedades no esperadas de aquellas que ya hubieran formado parte de las expectativas del usuario para lo que se ha tomado como referencia la variación en el nivel de deterioro financiero de la empresa en el año de recepción de dicha salvedad. Los resultados obtenidos indican que el incremento significativo en la probabilidad de quiebra (efecto profecía) se limita a aquellos casos en los que la salvedad no hubiera sido previamente descontada por el usuario. Nuestro estudio contribuye a la literatura no sólo por ser el primero que contrasta el fenómeno de la profecía autocumplida utilizando datos de archivo en el entorno español, sino asimismo por ayudar a comprender las circunstancias que contribuyen a su generación.

SSRN Electronic Journal, 2000

This paper studies the relevance of audit qualifications and auditor selection for the external s... more This paper studies the relevance of audit qualifications and auditor selection for the external stakeholders of private companies in code-law countries. Employing a sample of private Spanish firms, we find that the cost of debt is not influenced by auditor opinion, but it is strongly influenced by the selection of a highquality auditor. These findings suggest that Spanish banks' and lenders' decisions are more influenced by the reputation of the auditor than by the content of the audit report. These results are robust to both the unobserved heterogeneity problem and the potential endogenous nature of the explanatory variables.

European Accounting Review, 2008

This study examines the relationship between earnings management and auditor behaviour in the pre... more This study examines the relationship between earnings management and auditor behaviour in the pre-bankrupt client segment of the Spanish audit market. As proxies for auditor behaviour, we use type of audit firm (Big N/non-Big N) and type of audit report. In contrast ...

Journal of Management & Governance, 2012

This paper compares the value of audit quality, proxied by the selection of a big N auditor, to t... more This paper compares the value of audit quality, proxied by the selection of a big N auditor, to the external claimholders of private and public companies. Although the combination of a lower ownership concentration of public companies, the greater demand for financial information quality about these companies and their higher litigation risk can result in the expectation that audit quality should be more valuable for public than for private companies, the greater information asymmetry between the managers and the external stakeholders and the unavailability of alternative mechanisms for monitoring the managers can make external audit more valuable for the external claimholders of private companies. In this paper, we test these two competing views by analysing if banks and lenders take into account auditor selection in the formation of the cost of debt. Our results support the second view: we find that only private companies obtain a lower cost of debt when they are audited by a high-quality auditor. These results are robust to both endogeneity and unobserved firm-specific heterogeneity.

Journal of Management & Governance, 2000

This paper compares the value of audit quality, proxied by the selection of a big N auditor, to t... more This paper compares the value of audit quality, proxied by the selection of a big N auditor, to the external claimholders of private and public companies. Although the combination of a lower ownership concentration of public companies, the greater demand for financial information quality about these companies and their higher litigation risk can result in the expectation that audit quality should be more valuable for public than for private companies, the greater information asymmetry between the managers and the external stakeholders and the unavailability of alternative mechanisms for monitoring the managers can make external audit more valuable for the external claimholders of private companies. In this paper, we test these two competing views by analysing if banks and lenders take into account auditor selection in the formation of the cost of debt. Our results support the second view: we find that only private companies obtain a lower cost of debt when they are audited by a high-quality auditor. These results are robust to both endogeneity and unobserved firm-specific heterogeneity.

El objetivo del presente estudio es buscar patrones en el comportamiento descriptivo del Estado d... more El objetivo del presente estudio es buscar patrones en el comportamiento descriptivo del Estado de Flujos de Tesorería según las etapas del ciclo de vida de la empresa. Partiendo de las 4 etapas clásicas (introducción, crecimiento, madurez y declive) se contrastan hipótesis relacionadas con signos, correlaciones devengo-tesorería e importancia relativa de cada uno de los tres componentes del Estado. El

European Accounting Review, 2008

This study examines the relationship between earnings management and auditor behaviour in the pre... more This study examines the relationship between earnings management and auditor behaviour in the pre-bankrupt client segment of the Spanish audit market. As proxies for auditor behaviour, we use type of audit firm (Big N/non-Big N) and type of audit report. In contrast to the USA, audit reports in Spain often include modifications other than a going-concern opinion. This allows us to study the relationship in more detail than is possible with US data. The results of our study show that discretionary accruals are negatively related to going-concern opinions but are positively related to reports modified for reasons other than going-concern problems. However, unlike Butler et al. (Journal of Accounting and Economics, 37, pp. 139–165, 2004) the negative relationship is explained not by liquidity survival tactics but by auditor conservatism. We find this conservatism not only in the value of discretionary accruals but also in the qualifications that accompany a going concern. In these cases GAAP violations have a much greater income effect and a stronger relationship with the reversal of manipulation accumulated over the years than with the manipulation introduced during the last year. Finally, our results suggest that Big N differentiation in a code-law country is context-specific and depends on the business risk parameter of the ‘audit risk model’. In particular, for high-risk firms, Big N auditors show a significantly lower level of discretionary accruals and a greater propensity to issue a going-concern opinion.

Spanish Journal of Finance and Accounting / Revista Española de Financiación y Contabilidad, 2012

ABSTRACT El presente trabajo analiza el fenómeno de la profecía autocumplida en el contexto españ... more ABSTRACT El presente trabajo analiza el fenómeno de la profecía autocumplida en el contexto español, ya que reúne condiciones idóneas para su generación. Ante la posibilidad de que la reacción del usuario ante una salvedad al principio de empresa en funcionamiento no sea uniforme, se ha introducido un elemento de interacción que separa las salvedades no esperadas de aquellas que ya hubieran formado parte de las expectativas del usuario para lo que se ha tomado como referencia la variación en el nivel de deterioro financiero de la empresa en el año de recepción de dicha salvedad. Los resultados obtenidos indican que el incremento significativo en la probabilidad de quiebra (efecto profecía) se limita a aquellos casos en los que la salvedad no hubiera sido previamente descontada por el usuario. Nuestro estudio contribuye a la literatura no sólo por ser el primero que contrasta el fenómeno de la profecía autocumplida utilizando datos de archivo en el entorno español, sino asimismo por ayudar a comprender las circunstancias que contribuyen a su generación.

SSRN Electronic Journal, 2000

This paper studies the relevance of audit qualifications and auditor selection for the external s... more This paper studies the relevance of audit qualifications and auditor selection for the external stakeholders of private companies in code-law countries. Employing a sample of private Spanish firms, we find that the cost of debt is not influenced by auditor opinion, but it is strongly influenced by the selection of a highquality auditor. These findings suggest that Spanish banks' and lenders' decisions are more influenced by the reputation of the auditor than by the content of the audit report. These results are robust to both the unobserved heterogeneity problem and the potential endogenous nature of the explanatory variables.

European Accounting Review, 2008

This study examines the relationship between earnings management and auditor behaviour in the pre... more This study examines the relationship between earnings management and auditor behaviour in the pre-bankrupt client segment of the Spanish audit market. As proxies for auditor behaviour, we use type of audit firm (Big N/non-Big N) and type of audit report. In contrast ...

Journal of Management & Governance, 2012

This paper compares the value of audit quality, proxied by the selection of a big N auditor, to t... more This paper compares the value of audit quality, proxied by the selection of a big N auditor, to the external claimholders of private and public companies. Although the combination of a lower ownership concentration of public companies, the greater demand for financial information quality about these companies and their higher litigation risk can result in the expectation that audit quality should be more valuable for public than for private companies, the greater information asymmetry between the managers and the external stakeholders and the unavailability of alternative mechanisms for monitoring the managers can make external audit more valuable for the external claimholders of private companies. In this paper, we test these two competing views by analysing if banks and lenders take into account auditor selection in the formation of the cost of debt. Our results support the second view: we find that only private companies obtain a lower cost of debt when they are audited by a high-quality auditor. These results are robust to both endogeneity and unobserved firm-specific heterogeneity.

Journal of Management & Governance, 2000

This paper compares the value of audit quality, proxied by the selection of a big N auditor, to t... more This paper compares the value of audit quality, proxied by the selection of a big N auditor, to the external claimholders of private and public companies. Although the combination of a lower ownership concentration of public companies, the greater demand for financial information quality about these companies and their higher litigation risk can result in the expectation that audit quality should be more valuable for public than for private companies, the greater information asymmetry between the managers and the external stakeholders and the unavailability of alternative mechanisms for monitoring the managers can make external audit more valuable for the external claimholders of private companies. In this paper, we test these two competing views by analysing if banks and lenders take into account auditor selection in the formation of the cost of debt. Our results support the second view: we find that only private companies obtain a lower cost of debt when they are audited by a high-quality auditor. These results are robust to both endogeneity and unobserved firm-specific heterogeneity.