Abstract
<p class="Default"><span lang="EN-US">This study investigates whether the quality of firms’ financial reporting is influenced by the contracting of debt, using data on Portuguese private firms from 2013 to 2015. More specifically, the study uses earnings smoothing, magnitude of absolute discretionary accruals, and timeliness of disclosure as proxies for financial reporting quality. I find that private firms which contract more debt exhibit higher levels of financial reporting quality. Additionally, firms that contract larger amounts of debt and with a good financial performance tend to exhibit lower quality financial reporting. The results provide strong evidence that private firms have an interest in camouflaging their performance in the presence of higher levels of bank debt. </span></p>
Highlights
It is widely recognized that access to finance fosters growth and competition and is of the utmost importance for the economy, and for firms in particular
The results suggest that these firms conduct less earnings smoothing, report a lower level of absolute discretionary accruals, and the delay in disclosure of financial reporting is shorter
Controlling for other variables, the results show that as the contracting of debt increases, the quality of financial reporting improves significantly
Summary
Este estudio investiga si la calidad de la información financiera de las empresas se ve influenciada por el aumento de la deuda, utilizando los datos de las empresas privadas portuguesas de 2013 a 2015. El estudio utiliza el alisamiento de los resultados, la magnitud de los ajustes discrecionales absolutos y la puntualidad de divulgación como medidas de calidad de informe financiero. Los resultados muestran que las empresas privadas que contratan más deudas presentan niveles más altos de calidad de informes financieros. Las empresas que contratan grandes cantidades de deuda y con un buen rendimiento financiero tienden a mostrar informes financieros de menor calidad. Los resultados proporcionan una fuerte evidencia de que las empresas privadas tienen interés en camuflar su desempeño en presencia de niveles más altos de deuda bancaria. Códigos JEL: M41; G32 Palabras clave: Empresas privadas; Informe financiero; Deuda bancaria; Acreditaciones discrecionales; Puntualidad de divulgación
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