We examine whether the Public Company Accounting Oversight Board’s (PCAOB’s) international inspection access affects the usage of accounting-based debt covenants in bank loan contracts of American Depositary Receipt (ADR) borrowers. We show that there is an increase in the use of financial covenants in debt contracts after the auditor of an ADR borrower becomes subject to PCAOB inspections. We also document that lenders increase the usage of financial covenants only in loans to ADR borrowers domiciled in countries with weak home country intuitions, and the increase is more pronounced for ADR borrowers from countries without a local auditor regulatory oversight body. These findings suggest that PCAOB regulatory oversight enhances the perceived credibility of accounting numbers for debt contracting and serves as a substitute for the weak monitoring of auditors for ADR borrowers domiciled in countries with weak country institutions.

我们研究了上市公司会计监督委员会 (PCAOB) 的国际检查权限是否会影响美国存托凭证 (ADR) 借款人的银行贷款合同中基于会计的债务契约的使用。我们表明，在 ADR 借款人的审计师接受 PCAOB 检查后，债务合同中财务契约的使用有所增加。我们还记录了贷方仅在向居住在母国直觉薄弱的国家的 ADR 借款人的贷款中增加金融契约的使用，并且对于来自没有当地审计师监管机构的国家的 ADR 借款人的增加更为明显。