In this paper, we analyze whether the voluntary purchase of audit reviews lowers firms' cost of debt. An audit review is a tool through which boards assess interim financial reports' quality on a timely basis throughout the year. The voluntary purchase of an audit review is therefore likely to...

Within a sample of firms undergoing financial distress, where the incentive to send false positive signals is high, we show that insider trading serves as a credible information channel about potential recovery for outside investors. We employ credit rating downgrades as confirmation of the...