Implications of the Joint Provision of CSR Assurance and Financial Audit for Auditors' Assessment of Going-Concern Risk

• 成果类型: Article
• 署名作者: Dal Maso, Lorenzo; Lobo, Gerald J.; Mazzi, Francesco; Paugam, Luc
• 署名单位: ESSEC Business School; University of Houston System; University of Houston; University of Florence; Hautes Etudes Commerciales (HEC) Paris
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12560
• 发表日期: 2020
• 页码: 1248-1289
• 关键词: nonaudit service fees; social-responsibility assurance; ACTUALLY VALUE SUSTAINABILITY; quality evidence; reporting quality; earnings; INDEPENDENCE; association; LITIGATION; MARKETS

摘要

We examine whether the joint provision of corporate social responsibility (CSR) assurance services and financial audit by the same audit firm influences auditors' assessment of going-concern risk. We predict that the provision of CSR assurance and financial audit by the same audit firm creates CSR-related knowledge spillovers from the CSR assurance team to the financial audit engagement team, which helps in the auditor's assessment of going-concern risk. Using more than 28,000 firm-year observations from 55 countries, we document that, relative to audit firms that provide only the financial audit, audit firms that provide both CSR assurance and financial audit for the same client (i) issue more frequent going-concern opinions and have lower Type II going-concern errors, (ii) have clients that book larger environmental and litigation provisions, (iii) report earnings that are more persistent and value-relevant and are less likely to book income-decreasing earnings restatements, and (iv) do not charge higher audit fees or total fees. Our results are important especially because of firms' increasing exposure to CSR risks and the growing number of countries that require assurance of CSR reports.