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Dr. Chenqi Zhu
Assistant Professor of Accounting
Paul Merage School of Business Irvine
University of California Irvine

We use pageview records on a trade credit monitoring web platform to examine suppliers’ use of buyers’ public accounting information in credit monitoring. We investigate predictions from existing theory and empirical research, and find results that both corroborate and extend prevailing thought. Our broadest finding is that suppliers are active users of firms’ accounting information, despite having simultaneous access to credit scores and reports from professional intermediaries. Among a variety of other novel findings are that suppliers are more likely to use accrual accounting information than cash flows, are regular users of detailed 10K/Q filings, increase their use of accounting reports following restatements, and use credit score changes as a surveillance mechanism to trigger independent analysis. Our study demonstrates that the direct use of accounting information plays a central role in trade credit monitoring and provides numerous insights to motivate future research.