Project Management

Financial Statements And Loan Decision In Community Banks

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Executive Summary

The loan decision model of community banks is known to differ from loan decision model of large banks. This paper focuses on community banks and examines whether financial statements are important consideration in loan decision and whether level of attestation affects loan officers' perception of the importance of those financial statements. Results indicate that while financial statements are perceived as important information in loan decision of community banks, loan officers may not adequately consider the credibility of the financial statements when evaluating loans.

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