The comply-or-explain principle is a common feature of corporate governance codes. While prior studies investigated compliance with corporate governance codes as well as the effects of compliance on firm behaviour and performance, explanations for deviations from a corporate governance code...

Prior research documents that financial capacity could be positively or negatively associated with the demand for audit quality. We re-examine this relation using changes in local real estate prices as exogenous shocks to corporate financial capacity. Using auditor size, auditor industry...