The Impact of Corporate Charitable Contributions on Audit Hours
| Autor: | Jaeyon Chu, Yongsuk Yun, Hongmin Chun |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
corporate charitable contribution
media_common.quotation_subject Geography Planning and Development TJ807-830 Accounting Audit Management Monitoring Policy and Law TD194-195 Renewable energy sources legitimization 0502 economics and business Quality (business) GE1-350 Endogeneity Product (category theory) Robustness (economics) corporate social responsibilities media_common 050208 finance Environmental effects of industries and plants Renewable Energy Sustainability and the Environment business.industry 05 social sciences Environmental sciences Corporate social responsibility Business audit effort Capital market 050203 business & management Reputation |
| Zdroj: | Sustainability, Vol 11, Iss 4, p 1045 (2019) Sustainability Volume 11 Issue 4 |
| ISSN: | 2071-1050 |
| Popis: | Corporate social responsibility (CSR) is a pertinent strategy to enhance consumer perception of product quality and a company&rsquo s reputation. A growing body of literature has investigated whether corporate charitable contributions play a similar role to that of corporate social responsibility. Controversy still remains over the cause and effect of corporate charitable contributions. This study&rsquo s objective was to examine whether auditors apply more effort when reviewing firms with a higher level of corporate charitable contributions. For example, if auditors perceive corporate charitable contributions as the opportunistic behavior of managers, then the auditors thoroughly review and prepare financial statements. However, if auditors assess corporate charitable contributions as one of a firm&rsquo s ethical responsibilities, then they are not likely to put in more effort when reviewing such firms. This paper aims to examine how capital market participants assess a firm&rsquo s charitable contributions. Using an extensive set of data for Korea from 2008 to 2015, we conducted a battery of robustness analyses to address various endogeneity issues using the abnormal audit hour model, propensity score matching method, and 2SLS regression. We found that corporate charitable contributions were positively associated with audit hours. It indicated that auditors applied more effort when they reviewed firms with corporate charitable contributions. The results suggest that auditors in Korea do not perceive corporate charitable contributions as a CSR activity but rather as an indication of the opportunistic behavior of managers. |
| Databáze: | OpenAIRE |
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