Date of Award


Degree Type


Degree Name

Doctor of Philosophy


Business Administration

Major Professor

Bruce K. Behn

Committee Members

Terry L. Neal, James A. Chyz, Andy Puckett


Using a sample of U.S. firms, this study explores whether accounting information risk has an impact upon corporate credit ratings, a long term measure of the cost of debt. Theory suggests that accounting information risk could impact shorter term measures of the cost of debt, but is unclear as to whether it will have measurable effects upon the long term cost of debt. This study employs SFAS 157 level three fair value disclosures as a proxy for accounting information risk. The findings suggest higher levels of accounting information risk negatively impact credit ratings. This is supported by both levels and changes analyses. Increases to accounting information risk are also more effective in prohibiting a credit upgrade than in effectuating a credit downgrade. These findings are also robust to matching techniques and other model specifications. Ultimately, these findings support the usefulness and efficacy of disclosures for uncertain fair value accounting estimates.

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