CONCLUSION AND FUTURE RESEARCH
This paper has examined two streams of commercial lending research. The first involves how accounting information impacts lending judgments, with most of the studies focusing on the usefulness of accounting data or the effects of different accounting methods on loan officers’ decisions. Other studies involve lenders’ bankruptcy/default judgments or their decision processes. The second research stream deals with the effects of various forms of assurance services on lending judgments. Most of these studies investigate issues relating to providing audits, internal control reports, and limited assurance engagements. Other studies on the effects of assurance services mainly focus on the independence or quality of the assurance providers.
Notably absent in the body of literature dealing with how accounting information impacts lending judgments is research on the effects of GAAP versus International Financial Reporting Standards. Also, no studies have examined lenders’ judgments concerning GAAP measures versus their related non-GAAP measures. In the area of assurances services, research has focused on external audits, but is lacking on the impact of internal auditing on lending decisions. Future research should address whether the existence and quality of a loan applicant’s internal audit function matters to lenders.
