Causes and consequences of improvements in the information environment for Swedish small and mid-sized firms
Paananen, Mari; Renders, Annelies; Blomkvist, Marita
Date: 9 March 2016
Article
Journal
Accounting in Europe
Publisher
Taylor & Francis
Publisher DOI
Abstract
We investigate improvements in the information environment and financing decisions for Swedish small and mid-sized firms. These firms are required to file audited annual reports. We create an index capturing accounting standards choices, auditor quality, and board size reflecting information environment improvements. We find an association ...
We investigate improvements in the information environment and financing decisions for Swedish small and mid-sized firms. These firms are required to file audited annual reports. We create an index capturing accounting standards choices, auditor quality, and board size reflecting information environment improvements. We find an association between increased short-term financing and information environment improvements: The most common actions are to switch to a Big 4 auditor or a chartered accountant and to add independent board members as opposed to changing the accounting standards used. These improvements are associated with a switch to long-term debt and a reduction of cost of debt. Our findings are relevant for the ongoing discussion on accounting regulation for private firms both in the US and Europe since they show that (Swedish) private firms use other ways to improve the information environment in order to access to less costly long-term bank debt besides adopting IFRS.
Finance and Accounting
Faculty of Environment, Science and Economy
Item views 0
Full item downloads 0