کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
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1006016 | 938106 | 2009 | 15 صفحه PDF | دانلود رایگان |
I examine whether donors favor charities that use high quality auditors and whether the propensity to donate varies directly with audit quality. I find that audit quality affects donor decisions in the market for contributions. From a signaling perspective, charities benefit simply from engaging a higher quality auditor. From an information perspective, donors are more sensitive to changes in reported accounting information verified by a high quality auditor. I also find that, after conditioning on the charity’s reputation, donors are still willing to give more to charities aligned with a quality auditor, but the effect of audit quality choice dissipates with the size of the charity. Thus, a charity’s reputation and the choice of auditor are substitute mechanisms for signaling the credibility of financial information to donors.
Journal: Journal of Accounting and Public Policy - Volume 28, Issue 6, November–December 2009, Pages 510–524