Putting TRAC to Work
  Legal and Scholarly
Bank of Finland Research Discussion Papers
March 2014

Beauty is in the eye of the beholder: The effect of corporate tax avoidance on the cost of bank loans
By Iftekhar Hasan Chun - Keung (Stan) Hoi Qiang Wu Hao Zhang


Banks should be more sensitive to information risk and IRS audit risk when lending to firms with greater levels of these risks. Following Bharath, Sunder, and Sunder (2008) and Guedhami and Pittman (2008), we use 1) abnormal discretionary accruals based on the modified Jones (1991) model (Dechow, Sloan, and Sweeney,1995) to capture firm information risk; and (2) the threat of a face-to-face IRS audit as reported by Transactional Records Access Clearinghouse (TRAC) to capture the IRS audit probability........[citing TRAC research].


Transactional Records Access Clearinghouse, Syracuse University
Copyright 2014
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