This paper investigates the impact of corporate social responsibility (CSR) disclosure quantity, quality, and external validation concerning assurance on capital constraints.We examine if these disclosure characteristics matter to the investors in the financial market, then they should be positively evaluated by financial market participants.More specifically, we study the effects of disclosure quantity, quality, and assurance on the access to financial resources for reporting firms. Analysis of data of an international sample for the period of 2007-2016 significantly supports the value relevance idea of CSR disclosure quality. We document that availability of more information about the firm's CSR initiatives eases the financial access. Furthermore, the quality and external assurance of CSR disclosure further strengthen the relationship between disclosure and access to finance. Our paper not only provides support for buying assurance but also argue for better assurance quality.

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In this study, we attempt empirically to investigate the relationship between audit quality and the probability that a financially distressed company would receive a going-concern opinion. Auditor decision-making in the presence of going-concern uncertainties may be characterized as a two-stage process. The first stage is the identification of a potential going-concern problem and the second stage is to determine whether the particular company should receive a qualified going-concern opinion. A sample of 1,199 non-financial Spanish company-years has been obtained from the database issued by the Stock Exchange National Commission for the fiscal years ending between December 1991 and December 2000. The results indicate that audit quality (measured by the auditor's level of independence and knowledge) affects the probability that a financially distressed company would receive a going-concern opinion. This probability is influenced not only by the auditor's ability to detect financial uncertainties, but also by the auditor's decision-making as to what type of opinion should be finally issued.

The aim of this study was to evaluate the quality of sustainability assurance reports and some aspects associated with it: expertise (a practitioner attribute) and experience (a characteristic of the contractual relationship). Specifically, it examines the impact of the assurance provider's expertise and experience on assurance quality, measured through an index based on a content analysis approach with items related to the reporting format, assurance procedures, and recommendations and opinions. This paper also examines the moderating effect of the type of assurance provider on these relationships. For a sample of international listed companies from the period 2007–14, our evidence shows greater quality of assurance reports when the assurers are industry specialists than when they are nonspecialists, because of their strong industry knowledge, and when the assurers have greater experience in the assurance market because of the extended length of the assurer–client relationship. In addition, the higher quality associated with industry expertise and experience is increased when assurance providers are also accounting firms, given their greater skills and training within the audit profession.

SUMMARY: In this study, we document evidence on the impact of mandatory rotation of audit firms on auditor independence using Spanish archival data. Rotation of audit firms every nine years was mandatory in Spain from 1988–1995. Although the rule was never enforced, the Spanish context provides a unique setting to examine the effects that mandatory audit firm rotation has on auditor behavior. We examine audit reports for a sample of financially stressed companies from 1991–2000 to compare audit reporting behavior in a regime with rotation (mandatory rotation period: 1991–1994) and one without rotation (post-mandatory rotation period: 1995–2000). We test two competing hypotheses concerning the impact of mandatory rotation on the likelihood of auditors' issuing going-concern modified audit opinions. We find no evidence to suggest that a mandatory rotation requirement is associated with a higher likelihood of issuing going-concern opinions. Our results suggest that auditors' incentives to protect their reputation have a positive impact on the likelihood of issuing going-concern opinions, while auditors' incentives to retain existing clients did not impact on their decisions in both the mandatory rotation and post-mandatory rotation periods. Overall, our results provide empirical support for the arguments put forward by opponents of mandatory rotation.