Employing a portfolio approach which controls directly for the sign (indirectly for the magnitude) of unexpected earnings, this study examines the stock market's reaction to qualified audit reports. There is no substantive evidence that qualifications affect equity prices in the month of their...

Within the last decade there has been much written about the possible link between the quality of a firm’s external financial reporting and its cost of equity capital. In this paper I provide my personal observations about the literature. I make the following points. I find the Francis et...