Using a measure of social capital provided by the Northeast Regional Center for Rural Development, we document that, after controlling for auditor effort, firms headquartered in U.S. counties with higher social capital are less likely to have ineffective internal control over financial reporting...

We examine whether and how auditors incorporate rollover risk in assessing a client’s risk. Rollover risk is the risk associated with long-term debt maturing in one year, which has to be refinanced of settled shortly. Debt has two counteracting effects on firms’ riskiness: increased...