 Financial expertise on audit committees of loan applicants: a research note to test the effects on lending decisionsArnold Schneider Accounting and Business Research, 2018, vol. 48, issue 2, 225-235 Abstract: The purpose of this study is to examine whether audit committee financial expertise matters when making commercial lending decisions. Commercial lenders rely on audited financial statements in making lending decisions, and the quality of these financial statements is impacted by the capabilities of audit committees having oversight of financial reporting. It is widely believed that this oversight is enhanced when audit committees contain members with financial expertise. A behavioural experiment is conducted where commercial lending officers make risk assessments and provide probabilities of granting loans based on a hypothetical scenario. This paper finds insufficient evidence to conclude that the existence of financial expertise on audit committees makes a difference to lenders. When replacing audit committee members, however, financial expertise does appear to matter to lenders in some cases. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:acctbr:v:48:y:2018:i:2:p:225-235 Ordering information: This journal article can be ordered from DOI: 10.1080/00014788.2017.1357460 Access Statistics for this article Accounting and Business Research is currently edited by Vivien Beattie More articles in Accounting and Business Research from Taylor & Francis Journals |
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