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Internal Control Weaknesses, Family Ownership and the Cost of Debt: Evidence from the Tunisian Stock Exchange

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  • Achraf Guidara
  • Imen Achek
  • Saida Dammak

Abstract

This study investigates the effect of internal control weaknesses (ICW) and family ownership on the cost of debt in the Tunisian setting. We document that ICW and family ownership are positively associated with the cost of debt. When testing for the moderating effect of family ownership on the association between ICW and the cost of debt, we document that the positive effect of ICW on the cost of debt is more pronounced under high family ownership in the Tunisian setting. Furthermore, the positive and significant association between ICW and the cost of debt is more prevailing for firms audited by non-Big 4 auditors and industrial companies. These findings may have policy implications for Tunisian policymakers with respect to the establishment of internal control standards.

Suggested Citation

  • Achraf Guidara & Imen Achek & Saida Dammak, 2016. "Internal Control Weaknesses, Family Ownership and the Cost of Debt: Evidence from the Tunisian Stock Exchange," Journal of African Business, Taylor & Francis Journals, vol. 17(2), pages 148-166, May.
    • Handle: RePEc:taf:wjabxx:v:17:y:2016:i:2:p:148-166
    DOI: 10.1080/15228916.2016.1126884
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    References listed on IDEAS

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    Cited by:

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    2. Samara, Georges, 2021. "Family businesses in the Arab Middle East: What do we know and where should we go?," Journal of Family Business Strategy, Elsevier, vol. 12(3).

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