Theoretically, AUDRQ can take values between 0 and 8, with higher values indicating
more external auditing requirements.
DISCRQ indicates the degree of accounting and information disclosure
requirements in the banking sector. The variable can take values between 0 and 6
by adding 1 if the answer is yes and 0 otherwise, for each one of the following six
questions:
(1) Does accrued, though unpaid, interest/principal enter the income statement
while the loan is still performing?
(2) Are financial institutions required to produce consolidated accounts covering
all bank and any non-bank financial subsidiaries?
(3) Are off-balance sheet items disclosed to supervisors?
(4) Must banks disclose their risk management procedures to the public?
(5) Are off-balance sheet items disclosed to public?
(6) Are bank dire