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has been cited by the following article:

• TITLE: Corporate Governance Practices and Audit Quality: Do They Matter for the Cost of Debt?

  AUTHORS: Sami Bacha

  KEYWORDS: Corporate Governance, Audit Quality, Cost of Debt, Ownership Structure, Audit Committee

  JOURNAL NAME: Theoretical Economics Letters, Vol.9 No.7, September 17, 2019

  ABSTRACT: This paper sheds light on the effect of corporate governance practices and audit quality on the cost of debt. Particularly, we investigate the effect of the ownership structure and the audit committee independance, as well as the reputation of the external auditor, on the cost of debt. Based on a sample of Tunisian listed companies over the period 2007 to 2016 and using OLS regression models estimated with robust standard errors, our findings show that the cost of debt is inversely related to the director board size and the ownership concentration. Tunisian debtholders favour monitoring mechanisms that are likely to limit managerial opportunism and consider board monitoring effectiveness and the presence of blockholders as a source of greater assurance. The results also reveal evidence of a debt pricing effect of audit quality as measured by auditor size (Big4). The findings report, however, that the board composition and the presence of managerial shareholders, as well as the independence of audit committee have non-significant effect on the cost of debt.