The usefulness of the audit report in investment and financing decisions

Abstract

The usefulness of the auditor’s report is sometimes called into question, the validity of the information it contains for users when making decisions therefore being criticized. This survey is aimed, on the one hand, at dealers and brokering companies, and, on the other at banks to find out exactly how important the audit report is in the investment decisions that analysts make, as well as in lending decisions made by credit institutions. In this sense, the respondents are asked about the source they consider relevant when making decisions, that is to say, the influence the auditor’s opinion (clean, qualified, adverse or disclaimer) has when investing in and financing companies. The results show that users of audit reports consider the information provided in the auditor’s opinion as useful and important when making decisions, both regarding their decisions of investing in and financing companies as well as the amount of the investment or the loan to grant.

Citation

Duréndez Gómez‐Guillamón, A. (2003), "The usefulness of the audit report in investment and financing decisions", Managerial Auditing Journal, Vol. 18 No. 6/7, pp. 549-559. https://doi.org/10.1108/02686900310482687