20.500.12556/RUL-184415 Cost of debt for private firms revisited voluntary audits as a reflection of risk We examine the relation between voluntary audit and the cost of debt in private firms. We use a sample of 7,420 small private firms operating in the period 2006-2022 that are not subject to mandatory audits. Firms self-select into voluntary audits because of the economic setting (e.g., ownership complexity, export, subsidiary status) or because firm fundamentals limit their access to financial debt. In the outcome analyses, we find that voluntary audits result in higher, rather than lower, interest rates with increases ranging from approximately 1.7 percentage points, but going higher depending on the exact specification. This effect is present regardless of the perceived audit quality (Big-4 vs. non-Big-4), consistent across auditor types. Audited firms’ earnings are less informative about future operating performance. Voluntary audits facilitate access to financial debt for high-risk firms. The price paid is reflected in higher interest rates for voluntary audits – firms with higher information/fundamental risk. private company internal auditing indebtedness risk risk management private firms voluntary audit cost of debt self-selection bias zasebno podjetje notranja revizija zadolženost tveganje obvladovanje tveganj true false true Angleški jezik Slovenski jezik Članek v reviji 2026-07-06 16:28:49 2026-07-06 16:32:01 2026-07-07 04:17:51 0000-00-00 00:00:00 2026 0 0 24 str. article no. ǂ105474 Vol. 109 Jul. 2026 0000-00-00 Zaloznikova Objavljeno NiDoloceno 0000-00-00 0000-00-00 0000-00-00 005.336.1 1059-0560 10.1016/j.iref.2026.105474 280069379 1-s2.0-S1059056026005873-main.pdf 1-s2.0-S1059056026005873-main.pdf 1 F154AC9389DF42E3D7BA624A701B9BD0 dc3ce2c59b4acc39851cff39c18d7859c47c94cbbd8abf303a4929a515725a98 388d2696-7947-11f1-9b0d-0050569b8976 https://repozitorij.uni-lj.si/Dokument.php?lang=slv&id=237197 https://www.sciencedirect.com/science/article/pii/S1059056026005873 0 41773d53-7947-11f1-9b0d-0050569b8976 https://repozitorij.uni-lj.si/Dokument.php?lang=slv&id=237198 Ekonomska fakulteta 0 0 0