Cost of debt, corporate disclosure and audit report lag

摘要

In this paper, we investigate empirically the relationship between the cost of debt and financial reporting quality for the case of French firms. To do so, we utilise a sample composed of 128 French companies listed in the SBF250 during the period from 2007 to 2011. We use voluntary disclosure and timeliness measured through audit report lag as a measure of financial reporting quality. From the empirical findings, we remark that the disclosure policy adopted by the company and timeliness affect the cost of debt. Also, we find that voluntary disclosure of French companies has a negative consequence on the cost of debt independently of audit report lag.