{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/34242"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/34242","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Banks' acquisition of private information about financial misreporting","abstract":"Made available in DSpace on 2012-09-18T21:07:33Z (GMT). No. of bitstreams: 3 Chen_Po-Chang.pdf: 402401 bytes, checksum: 28636c8bed4de247d7cbf3e63ac6cebd (MD5) Chen_Po-Chang.docx: 1471963 bytes, checksum: e4d684e0ea0e39d7faef20210d1e0396 (MD5) license.txt: 4056 bytes, checksum: d9c9c1f40160014b0b6d5fa05ffef84a (MD5)","abstract_html":"Made available in DSpace on 2012-09-18T21:07:33Z (GMT). No. of bitstreams: 3 Chen_Po-Chang.pdf: 402401 bytes, checksum: 28636c8bed4de247d7cbf3e63ac6cebd (MD5) Chen_Po-Chang.docx: 1471963 bytes, checksum: e4d684e0ea0e39d7faef20210d1e0396 (MD5) license.txt: 4056 bytes, checksum: d9c9c1f40160014b0b6d5fa05ffef84a (MD5)","abstract_has_math":false,"creators":["Chen, Po-Chang"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Accountancy","degree_department":null,"school":null,"contributors":["Abdel-Khalik, A. Rashad","Almeida, Heitor","Jackson, Kevin E.","Narayanamoorthy, Ganapathi S."],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2012,"date_issued":"2012-09-18T21:07:33Z","date_published":"2012-09-18T21:07:33Z","updated_at":"2026-07-22T22:25:30Z","subjects":["restatements","financial misreporting","bank loans","private information"],"languages":["en"],"rights":["Copyright 2012 Po-Chang Chen"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/2142/34242","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Abdel-Khalik, A. Rashad","Almeida, Heitor","Jackson, Kevin E.","Narayanamoorthy, Ganapathi S."]},{"key":"dc:creator","label":"Author","values":["Chen, Po-Chang"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2012-09-18T21:07:33Z","2012-08"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Accountancy"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["restatements","financial misreporting","bank loans","private information"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2012 Po-Chang Chen"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/2142/34242"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Made available in DSpace on 2012-09-18T21:07:33Z (GMT). No. of bitstreams: 3 Chen_Po-Chang.pdf: 402401 bytes, checksum: 28636c8bed4de247d7cbf3e63ac6cebd (MD5) Chen_Po-Chang.docx: 1471963 bytes, checksum: e4d684e0ea0e39d7faef20210d1e0396 (MD5) license.txt: 4056 bytes, checksum: d9c9c1f40160014b0b6d5fa05ffef84a (MD5)","This study investigates whether banks acquire information about the borrowing firms’ subsequent financial restatements during the misreporting period, a period in which firms issue misstated financial reports. Finance theory suggests that banks have superior ability in gathering and processing information. In this paper, I test whether banks respond to financial misreporting by their client firms before this malpractice becomes known to the public. I find that bank loans initiated to restating firms during the misreporting period have significantly higher interest spreads, more restrictive financial covenants, and shorter loan maturities than loans made to non-restating firms. This finding suggests that banks are aware of and responsive to borrowers’ ongoing financial misreporting. In contrast, equity holders do not respond differently to earnings announcements of restating firms than to those of non-restating firms. I also do not find an increase in analyst forecast dispersion for restating firms during the misreporting period. In addition, bondholders do not price new bond issues differently for restating and non-restating firms. Taken together, these empirical findings suggest that banks possess private information about ongoing financial misreporting by borrowers, which allows them to adapt their decisions more quickly than equity investors, financial analysts, and public debtholders.","Item withdrawn by Mark Zulauf (zulauf@illinois.edu) on 2012-07-10T19:50:24Z Item was in collections: University of Illinois Theses & Dissertations (ID: 1) No. of bitstreams: 2 Chen_Po-Chang.docx: 1470974 bytes, checksum: 327cc5c1dc9ccec43ef362ef3c50e953 (MD5) Chen_Po-Chang.pdf: 402091 bytes, checksum: dc16f8f615dd7bf2f0b4bde4c5ac70f6 (MD5)"]},{"key":"dc:title","label":"Title","values":["Banks' acquisition of private information about financial misreporting"]}]}],"canonical_facts":{"dc:contributor":["Abdel-Khalik, A. Rashad","Almeida, Heitor","Jackson, Kevin E.","Narayanamoorthy, Ganapathi S."],"dc:creator":["Chen, Po-Chang"],"dc:date":["2012-09-18T21:07:33Z","2012-08"],"dc:description":["Made available in DSpace on 2012-09-18T21:07:33Z (GMT). No. of bitstreams: 3 Chen_Po-Chang.pdf: 402401 bytes, checksum: 28636c8bed4de247d7cbf3e63ac6cebd (MD5) Chen_Po-Chang.docx: 1471963 bytes, checksum: e4d684e0ea0e39d7faef20210d1e0396 (MD5) license.txt: 4056 bytes, checksum: d9c9c1f40160014b0b6d5fa05ffef84a (MD5)","This study investigates whether banks acquire information about the borrowing firms’ subsequent financial restatements during the misreporting period, a period in which firms issue misstated financial reports. Finance theory suggests that banks have superior ability in gathering and processing information. In this paper, I test whether banks respond to financial misreporting by their client firms before this malpractice becomes known to the public. I find that bank loans initiated to restating firms during the misreporting period have significantly higher interest spreads, more restrictive financial covenants, and shorter loan maturities than loans made to non-restating firms. This finding suggests that banks are aware of and responsive to borrowers’ ongoing financial misreporting. In contrast, equity holders do not respond differently to earnings announcements of restating firms than to those of non-restating firms. I also do not find an increase in analyst forecast dispersion for restating firms during the misreporting period. In addition, bondholders do not price new bond issues differently for restating and non-restating firms. Taken together, these empirical findings suggest that banks possess private information about ongoing financial misreporting by borrowers, which allows them to adapt their decisions more quickly than equity investors, financial analysts, and public debtholders.","Item withdrawn by Mark Zulauf (zulauf@illinois.edu) on 2012-07-10T19:50:24Z Item was in collections: University of Illinois Theses & Dissertations (ID: 1) No. of bitstreams: 2 Chen_Po-Chang.docx: 1470974 bytes, checksum: 327cc5c1dc9ccec43ef362ef3c50e953 (MD5) Chen_Po-Chang.pdf: 402091 bytes, checksum: dc16f8f615dd7bf2f0b4bde4c5ac70f6 (MD5)"],"dc:identifier":["http://hdl.handle.net/2142/34242"],"dc:language":["en"],"dc:rights":["Copyright 2012 Po-Chang Chen"],"dc:subject":["restatements","financial misreporting","bank loans","private information"],"dc:title":["Banks' acquisition of private information about financial misreporting"],"thesis:degree_discipline":["Accountancy"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois at Urbana-Champaign"]},"updated_at":"2026-07-22T22:25:30Z"}