Voluntary Audits Boost Company Credibility, Mandatory Audits Stifle Valuable Signals
The study compared companies in the UK that chose to have audits done voluntarily versus those that were required to have audits. Companies that voluntarily had audits saw improvements in their credit ratings, while those that skipped audits saw their ratings drop. This suggests that choosing to have an audit can send a positive signal to investors and improve a company's reputation.
