We assess whether financial statement audits reduce the risk of losses to capital providers. Prior research documents a negative association between financial statement audits and perceived credit risk or interest costs, but surprisingly few studies assess whether lower perceived risk or...

The quality of financial statement (FS) audits integrated with audits of internal controls over financial reporting (ICFR) depends upon the quality of ICFR information used in, and its integration into, FS audits. Recent research and PCAOB inspections find auditors underreport existing ICFR...