financial reporting. To analyze these effects, we combine U.S. Census data with SEC enforcement actions against firms with … serious misreporting (“fraud”). We find, compared to a matched sample, that fraud firms' employee wages decline by 9% and the … separation rate is higher by 12% during and after fraud periods. Employment growth at fraud firms is positive during fraud …

consumers' beliefs about the credibility of firms' CSR claims, which depend in turn on the (expected) fines for fraud. First, we … likelihood of certification. Second, fraud only arises when the fines for fraud are at intermediate levels and some CSR firms do … not certify their practices. Third, the presence of fraud comes at a cost for firms by inducing lower equilibrium prices …