Accruals quality and the cost of debt: Evidence from Vietnam

Ha Thi Thu Le, Xuan Vinh Vo and Thi Thuc Vo

International Review of Financial Analysis, 2021, vol. 76, issue C

Abstract: This study investigates the impact of accruals quality (AQ) on the cost of debt. Using a sample of Vietnamese listed companies during the period 2012–2017, we show that AQ has a significant negative relation with the cost of debt. Particularly, the 10% best AQ firms enjoy a 1.35% lower interest costs than the 10% worst AQ firms. Furthermore, the discretionary AQ component has a significant negative association with the cost of debt, while innate AQ shows an insignificant impact on the cost of debt. The study delivers an important message to firms regarding the economic benefits of providing high-quality accounting information.

Keywords: Accruals quality; Cost of debt; Discretionary accruals quality; Innate accruals quality; Information risk (search for similar items in EconPapers)
JEL-codes: G21 G32 M41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:76:y:2021:i:c:s1057521921000697

DOI: 10.1016/j.irfa.2021.101726

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