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Audit Quality Auditor Compensation And Ipo Underpricing
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Book Synopsis Audit Quality, Auditor Compensation and IPO Underpricing by : Xin (Simba) Chang
Download or read book Audit Quality, Auditor Compensation and IPO Underpricing written by Xin (Simba) Chang and published by . This book was released on 2007 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: By examining a sample of Australian firms going public over the period 1996 to 2003, we jointly study the impact of audit quality on auditor compensation and IPO underpricing. We find that quality (Big 4) audit firms earn significantly higher fees than Non-Big 4 auditors, and audit quality is positively associated with IPO underpricing. The positive relation between audit quality and underpricing is more pronounced for small issues, IPOs underwritten by non-prestigious underwriters, and those that are not backed by venture capitalists. Taken together, our results suggest that quality auditors serve as a signaling device that enhances post-issue market value of equity.
Book Synopsis Auditor Industry Experience and Initial Public Offerings by : Randal Jeffrey Elder
Download or read book Auditor Industry Experience and Initial Public Offerings written by Randal Jeffrey Elder and published by . This book was released on 1993 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Costs and Benefits of Audit Quality in the IPO Market by : Chris E. Hogan
Download or read book Costs and Benefits of Audit Quality in the IPO Market written by Chris E. Hogan and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the tradeoffs that an entrepreneur makes in an initial public stock offering between the incremental costs and benefits of selecting a Big 6 audit firm. The benefit of hiring a Big 6 auditor is assumed to be reduced underpricing, consistent with Beatty (1989) and Balvers, et al. (1988). The cost of hiring a Big 6 auditor is higher auditor compensation. Evidence drawn from a sample of IPOs during the early 1990s is consistent with a differentiated market for audit services where owners select the type of auditor that minimizes the sum of underpricing and auditor compensation costs.
Book Synopsis An Empirical Investigation of IPO Underpricing and the Change to the LLP Organization of Audit Firms by : Steven R. Muzatko
Download or read book An Empirical Investigation of IPO Underpricing and the Change to the LLP Organization of Audit Firms written by Steven R. Muzatko and published by . This book was released on 2006 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relationship between the 1994 change in audit firm legal structure from general partnerships to limited liability partnerships (LLPs) on underpricing in the initial public offering (IPO) market. The change in legal structure of audit firms reduces an audit firm's wealth at risk from litigation damages and reduces the incentives for intrafirm monitoring by partners within an audit firm. Prior research suggests that underpricing protects underwriters from litigation damages, and that the level of underpricing varies inversely with both the amount of implicit insurance provided by the audit firm and the quality of the audit services provided. We hypothesize the change in audit firm legal structure reduced the assets available from audit firms in IPO-related litigation and indirectly reduced audit quality by lowering intrafirm monitoring. As a result, underwriters have incentives as a joint and several defendant with the audit firms to increase IPO underpricing, particularly for high-litigation-risk IPOs, following audit firms' shifts to LLP status. Our findings are consistent with this hypothesis.
Book Synopsis Audit Quality and IPO Underpricing by : Tengku Rahimah Tengku Arifin
Download or read book Audit Quality and IPO Underpricing written by Tengku Rahimah Tengku Arifin and published by . This book was released on 2010 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Economics of Audit Quality by : Benito Arrunada
Download or read book The Economics of Audit Quality written by Benito Arrunada and published by Springer Science & Business Media. This book was released on 2013-11-11 with total page 203 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book focuses on market mechanisms which protect quality in the provision of audit services. The role of public regulation is thus situated in the context defmed by the presence of these safeguard mechanisms. The book aims to contribute to a better understanding of these market mechanisms, which helps in defining the con tent of rules and the function of regulatory bodies in facilitating and strengthening the protective operation of the market. An analysis at a more general level is provided in the three chapters making up Part 1. In the four chapters of Part 2, on the other hand, this analysis is applied to a particular problem to determine how those non-audit services often provided by auditors to their audit clients should be regulated. Finally, Chapter 8 contains a summary of the analysis and conclusions of the work. The conclusion with regard to non-audit services is that their provision generates beneficial effects in terms of costs, technical competence, professional judgment and competition and, moreover, need not prejudice auditor independence or the quality of these services. This as sessment leads, in the normative sphere, to recommending a legislative policy aimed at facilitating the development and use of safeguards provided by the free action of market forces. Regulation should thus aim to enable the parties-audit firms, self-regulatory bodies and audit clients-to discover through competitive market interaction both the most efficient mix of services and the corresponding quality safeguards, adjusting for the costs and benefits of each possibility.
Book Synopsis The Impact of Audit Quality on Cash Incentive Compensation and Cost of Capital by : Guy D. Fernando
Download or read book The Impact of Audit Quality on Cash Incentive Compensation and Cost of Capital written by Guy D. Fernando and published by ProQuest. This book was released on 2007 with total page 117 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Association between Audit Quality, Accounting Disclosures and Firm-Specific Risk by : Philip J. Lee
Download or read book The Association between Audit Quality, Accounting Disclosures and Firm-Specific Risk written by Philip J. Lee and published by . This book was released on 2000 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an environment where expected litigation costs are relatively low (Australia), we provide evidence strongly consistent with signaling considerations influencing the choice of auditor by initial public offering (IPO) firms. When our analysis is confined to smaller IPOs and/or IPOs using less prestigous underwriters (i.e., those IPOs where the use of a high quality auditor is less quot;routinequot;), we find that the probability of selecting a high quality auditor is positively related to IPO firms' riskiness, negatively related to the level of retained ownership by the initial owners and positively related to the decision to voluntarily provide information about expected earnings. these results jointly provide support for the signaling models of Datar, Feltham and Hughes (1991) and Hughes (1986), whereby the choice of a high quality auditor represents a trade-off with the level of retained ownership, but is complimentary to the extent of direct disclosure.
Book Synopsis Auditor Going Concern Reporting by : Marshall A. Geiger
Download or read book Auditor Going Concern Reporting written by Marshall A. Geiger and published by Routledge. This book was released on 2021-06-09 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: Auditor reporting on going-concern-related uncertainties remains one of the most challenging issues faced by external auditors. Business owners, market participants and audit regulators want an early warning of impending business failure. However, companies typically do not welcome audit opinions indicating uncertainty regarding their future viability. Thus, the auditor’s decision to issue a "going concern opinion" (GCO) is a complex and multi-layered one, facing a great deal of tension. Given such a rich context, academic researchers have examined many facets related to an auditor’s decision to issue a GCO. This monograph reviews and synthesizes 182 recent GCO studies that have appeared since the last significant review published in 2013 through the end of 2019. The authors categorize studies into the three broad areas of GCO: (1) determinants, (2) accuracy and (3) consequences. As an integral part of their synthesis, they summarize the details of each study in several user-friendly tables. After discussing and synthesizing the research, they present a discussion of opportunities for future research, including issues created or exacerbated as a result of the global COVID-19 pandemic. This monograph will be of assistance to researchers interested in exploring this area of auditor responsibility. It will also be of interest to auditing firms and individual practitioners wanting to learn what academic research has examined and found regarding this challenging aspect of audit practice. Auditing standard-setters and regulators will find it of interest as the authors review numerous studies examining issues related to audit policy and regulation, and their effects on GCO decisions. The examination of GCO research is extremely timely given the financial and business disruption caused by the worldwide COVID-19 pandemic. This unprecedented global event has caused companies, auditors and professional bodies to revisit and reassess their approach to going concern, and to think even more deeply about this fundamental business imperative.
Book Synopsis The Oxford Handbook of IPOs by : Douglas Cumming
Download or read book The Oxford Handbook of IPOs written by Douglas Cumming and published by Oxford Handbooks. This book was released on 2018-12-13 with total page 841 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This book provides a comprehensive analysis of IPOs. The chapters cover the latest information on a range of fundamental questions, including: How are IPOs regulated? How are IPOs valued? How well does an IPO perform in the short and long run, and what are the drivers of performance"--
Book Synopsis What If Auditing Was Not 'Low-Margin Business'? Auditors and Their IPO Clients as a Natural Experiment by : Ramgopal Venkataraman
Download or read book What If Auditing Was Not 'Low-Margin Business'? Auditors and Their IPO Clients as a Natural Experiment written by Ramgopal Venkataraman and published by . This book was released on 2015 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use the IPO setting to examine the relation between the auditor's exposure to legal liability, audit fees and audit quality. Consistent with the increase in litigation liability that an IPO audit implies, we find that auditors earn much higher fees for IPO engagements than for first-year, post-IPO engagements. Moreover, these higher fees are strongly associated with our proxy for the auditor's litigation exposure under the 1933 Act, the size of the IPO. In addition, we find that pre-IPO accruals are significantly less than first-year post-IPO accruals. Overall, we find no evidence to suggest that IPO companies engage in opportunistic earnings management. Taken together, IPOs do not appear to be quot;low-marginquot; engagements for auditors, nor does it seem that auditors permit their IPO clients an increase in accounting discretion.
Book Synopsis Collected Abstracts of the American Accounting Association's Annual Meeting by :
Download or read book Collected Abstracts of the American Accounting Association's Annual Meeting written by and published by . This book was released on 1993 with total page 766 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Principles of Auditing by : Rick Hayes
Download or read book Principles of Auditing written by Rick Hayes and published by Pearson Higher Ed. This book was released on 2014-06-26 with total page 737 pages. Available in PDF, EPUB and Kindle. Book excerpt: This text offers a structured approach to principles of auditing using International Standards on Auditing as its basis. Written by a team of influential professional auditors with a wealth of teaching experience this book provides a real world perspective on current auditing practices with coverage of cutting edge developments and techniques. The full text downloaded to your computer With eBooks you can: search for key concepts, words and phrases make highlights and notes as you study share your notes with friends eBooks are downloaded to your computer and accessible either offline through the Bookshelf (available as a free download), available online and also via the iPad and Android apps. Upon purchase, you'll gain instant access to this eBook. Time limit The eBooks products do not have an expiry date. You will continue to access your digital ebook products whilst you have your Bookshelf installed.
Book Synopsis The Future of Auditing by : David Hay
Download or read book The Future of Auditing written by David Hay and published by Routledge. This book was released on 2019-06-20 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Future of Auditing provides a concise overview of the function of auditing and the future challenges it faces, underpinned with suggestions for future research. It evaluates the key challenges facing the profession, such as quality, competition, and governance, as well as highlighting the under-explored areas of ethics, fraud, and judgement. The emphasis throughout is on the value of audit, and the importance of auditing research. Providing an original assessment of global versus national auditing, evidence-based auditing standards, and the structure of professional firms, David Hay critically examines the value of auditing from different standpoints. He critically reviews current assumptions about the value of audits of financial statements, and explores research opportunities and priorities to improve understanding of the value of auditing and its future role and function. This authoritative but accessible guide to the future of auditing and the challenges it faces will be useful not only to auditing researchers, but also to policy makers, standard setters, financial journalists, and auditing professionals seeking an accessible overview of current and future issues in auditing.
Book Synopsis Venture Capital and Firm Performance by : Jaeho Lee
Download or read book Venture Capital and Firm Performance written by Jaeho Lee and published by Routledge. This book was released on 2017-08-15 with total page 236 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides an analysis of the impact on underpricing and long-term performance of venture capital in IPOs, and of the ownership characteristics of venture capital companies. It investigates the performance of IPOs in Korea during the dot-com bubble-and-bust period. The book looks at venture capital firms and their participation, their reputation, and conflicts of interests, particularly in the context of the development of a new secondary stock market in an emerging market and these factors affect the pricing and performance effects of IPO firms. This book is a useful reference to those interested in promoting an active KOSDAQ type of stock market, and understanding how venture capitalists and their institutional affiliation may reduce information asymmetry and add value of IPO firms.
Book Synopsis The Effect of Audit Quality on the Valuation of Stocks in an IPO. by : Hossein Shah Hosseini
Download or read book The Effect of Audit Quality on the Valuation of Stocks in an IPO. written by Hossein Shah Hosseini and published by . This book was released on 2014 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: Price of the initial public offering stock of 80 companies listed in Tehran Stock Exchange during the 10-year period from 2003 to 2012 were studied regarding to the information of financial statements and documentary vision. Spss statistical software is utilized in order to for data analysis and the hypotheses testing. We used Kolmogorov-Smirnov test to examine data normality, linear regression model to test the research hypotheses and Pearson correlation coefficient for relationship between variables during this study.The results indicate that there is no relation between audit firm size, the type of audit opinion and amount of Explanatory Paragraphs of audit report (two audit quality elements) and the valuation of shares in an initial public offering, but there is a direct relationship between auditor specialization and quality of the information of audited financial statement (two other audit quality elements) and value of shares in initial public offerings.
Book Synopsis Are Audit Firms' Compensation Policies Associated with Audit Quality? by : Jürgen Ernstberger
Download or read book Are Audit Firms' Compensation Policies Associated with Audit Quality? written by Jürgen Ernstberger and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine how compensation policies of audit firms are associated with audit quality. Specifically, we investigate the effects of the ratio of variable to fixed compensation and the size of the basis for profit sharing (i.e., whether partners share profits in a small or in a large profit pool). For our analyses, we use detailed mandatory disclosure of the compensation policies in German audit firms. We document that compensation policies vary considerably across audit firms. We find that profit sharing in a small profit pool and high variable compensation are two characteristics of auditor compensation associated with lower audit quality. We also find some evidence suggesting that audit quality may be most at risk in cases in which partners rely more heavily on variable compensation to divide a relatively small profit pool. In additional analyses, we find that these associations are more pronounced in medium-sized audit firms. We argue that this finding may result from these firms being too large for audit partners to directly monitor each other effectively, yet simultaneously too small to have sophisticated centralized monitoring systems in place. Finally, we find that integrating partner-specific, non-profit-related performance metrics into the compensation structure mitigates the adverse effects of small profit pools and high variable compensation.
