Abstract
Several experimental studies have found that the auditors report did not significantly influence bank lending decisions. This study employs actual data to test whether the level of reporting service influences lending decisions of Privately Held Middle Market (PHMM) companies. The results indicate that the report type significantly influences at least one critical aspect of the lending decision the amount lent. Further, the report type was found to be strongly related to the amount of collateral and the size of the company. In addition, descriptive evidence is provided on what type of reporting services are purchased by PHMM companies and what type of accounting firms are providing those services.
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