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Corporate social responsibility and the assessment by auditors of the risk of material misstatement

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorLópez-Puertas, Mónica
dc.contributor.authorDesender, Kurt
dc.contributor.authorEpure, Mircea
dc.contributor.funderMinisterio de Economía y Competitividad (España)es
dc.contributor.funderComunidad de Madrides
dc.date.accessioned2022-06-24T14:52:12Z
dc.date.available2022-06-24T14:52:12Z
dc.date.issued2017-10
dc.description.abstractThis paper investigates whether, and how, firms’ corporate social responsibility (CSR) performance influences the auditor's assessment of the risk of material misstatement, whether due to fraud or error, at the financial statement level by analysing their pricing decision (i.e., audit fees). Using a panel data set of 12,330 firms from 28 countries over the period 2003–2012 and different measures of CSR performance, we find a U-shaped relationship between firms’ CSR performance and audit fees. This result suggests that there is an optimal level of CSR performance that minimizes the auditor's assessment of the risk of material misstatement, which in turn lowers the need for greater auditor effort; that is why auditors charge firms significantly less when their CSR performance is at the optimal level. Finally, we also show that the optimal level of CSR performance varies with the degree of environmental dynamism, ownership concentration and leverage.en
dc.description.sponsorshipThe authors also acknowledge support from the Fundación Ramon Areces, Projects ECO2013-48328-C03-3-P, ECO2013-45864-P, ECO2014-57131-R, ECO2016-75961-R and ECO2016-77579-C3-2-P financed by the Spanish Ministry of Science and Innovation and project INNCOMCON-CM(S2015/HUM-3417).en
dc.identifier.bibliographicCitationLópez Puertas-Lamy, M., Desender, K., & Epure, M. (2017). Corporate social responsibility and the assessment by auditors of the risk of material misstatement. Journal of Business Finance & Accounting, 44 (9-10), pp. 1276-1314en
dc.identifier.doihttps://doi.org/10.1111/jbfa.12268
dc.identifier.issn0306-686X
dc.identifier.publicationfirstpage1276es
dc.identifier.publicationissue9-10es
dc.identifier.publicationlastpage1314es
dc.identifier.publicationtitleJournal of Business Finance & Accountinges
dc.identifier.publicationvolume44es
dc.identifier.urihttps://hdl.handle.net/10016/35285
dc.identifier.uxxiAR/0000020643
dc.language.isoenges
dc.publisherWileyes
dc.relation.projectIDGobierno de España. ECO2013-45864-Pes
dc.relation.projectIDGobierno de España. ECO2016-75961-Res
dc.relation.projectIDGobierno de España. ECO2013-48328-C03-3-Pes
dc.relation.projectIDGobierno de España. ECO2014-57131-Res
dc.relation.projectIDGobierno de España. TEC-2010-21619-C04-01es
dc.relation.projectIDComunidad de Madrid.S2015/HUM-3417es
dc.rights© 2017 John Wiley & Sons, Ltd.en
dc.rights.accessRightsopen accessen
dc.subject.ecienciaEconomíaes
dc.subject.ecienciaEmpresaes
dc.subject.otherAudit feesen
dc.subject.otherCorporate social responsibility (CSR)en
dc.subject.otherCSR performanceen
dc.subject.otherRisk of material misstatementen
dc.titleCorporate social responsibility and the assessment by auditors of the risk of material misstatementen
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
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