The Impact of Corporate Social Responsibility on Regulatory Comment Letters: Evidence from Iran

Spanish Accounting Review 2022, doi: 10.6018/rcsar.398611

Posted: 8 Feb 2022

Date Written: January 4, 2022

Abstract

Securities commissions regularly review corporate reports, and if the review reveals a possible deficiency— such as a potential accounting error— or requires further clarifications, they send the company a comment letter (CL), including a request for providing written responses and relative additional information. Current study aims to examine whether and how corporate social responsibility (CSR) affects CLs. This empirical study is based on a sample of 437 Iranian firm year observations from 2011 to 2017. Results show that firms with more CSR are less likely to receive CL, that more CSR does not influence the association of managerial misbehavior and CLs, and that the negative association between CSR and CLs is stronger among firms facing higher environmental information asymmetry and firms having higher corporate governance quality. Collectively, this paper contributes to the literature by providing new evidence on the beneficial effect of CSR in the context of CLs.

Keywords: CSR, Oversight, Comment letter, Spillover effect, Managers, Emerging markets

JEL Classification: G34, M14, M48, Q01, Q38, Q56

Suggested Citation

Hesarzadeh, Reza, The Impact of Corporate Social Responsibility on Regulatory Comment Letters: Evidence from Iran (January 4, 2022). Spanish Accounting Review 2022, doi: 10.6018/rcsar.398611 , Available at SSRN: https://ssrn.com/abstract=4000202

Reza Hesarzadeh (Contact Author)

Ferdowsi University of Mashhad ( email )

Mashhad, 9177948974
Iran

HOME PAGE: http://Hesarzadeh.profcms.um.ac.ir/

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