Many regulations use private sector credit ratings to determine investment prohibitions and capital requirements for institutional portfolio investments. These regulations implicitly assume that different agencies have equivalent rating scales, despite the fact that some agencies assign systematically higher ratings than others. We assess the appropriateness of these regulatory practices by tes...

Credit rating agencies (CRA) are qualified as “auxiliaries of the financial information” by all the investors. Ratings are the results of a methodology used by CRA. Within the framework of a demystification of the method of work of agencies, the objective of this paper is to identify the importance of the accounting and financial information adjustments in the decisions of rating agencies. This...

Both auditors and credit rating agencies have been linked to financial scandals in recent history. In the early 2000’s, several of the “big five” accounting firms issued favorable audit opinions to public companies employing deceptive accounting practices. Some of these companies even committed outright fraud. Once the investing public caught wind of these accounting irregularities, it lost tru...

Regulators, investors, consumers, and insurance brokers use insurer financial strength ratings to evaluate the insolvency risk of insurers. This article investigates the factors influencing the decision to obtain a rating or multiple ratings, the determinants of ratings for the three major insurer rating agencies, and reasons for differences in ratings across agencies. This study indicates that...