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Do Abnormal Ipo Audit Fees Signal Ipo Audit Quality And Post Ipo Performance In Different Institutional Environments
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Book Synopsis Do Abnormal IPO Audit Fees Signal IPO Audit Quality and Post-IPO Performance in Different Institutional Environments? by : 張瑋茵
Download or read book Do Abnormal IPO Audit Fees Signal IPO Audit Quality and Post-IPO Performance in Different Institutional Environments? written by 張瑋茵 and published by . This book was released on 2019 with total page 125 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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 University Press. This book was released on 2018-11-15 with total page 841 pages. Available in PDF, EPUB and Kindle. Book excerpt: Initial public offerings (IPOs), or new listings of companies on stock exchanges, are among the most important form of finance and generate considerable attention and excitement. They are used to raise capital or to monetize investments by the early generation of venture capital and other private investors. They are increasingly international in scope and reach, especially with non-American firms offering on American stock exchanges. This handbook provides a comprehensive overview of why companies list on stock exchanges, how IPOs are regulated, initially valued, and their performance in the short and long run. The first part examines the economics of IPOs, and offers statistics and regulatory insights from the United States and other countries around the world. The volume then covers mergers versus IPOs, as well as reverse mergers and special purpose acquisition companies. Part III analyzes institutional ties in IPOs, including analysts, investment banks, auditors, and venture capitalists. The fourth section provides international perspectives on IPOs from a number of countries around the world. Part V discusses alternatives to IPOs, including private marketplaces, and crowdfunding. Reflecting the range of disciplines that analyze IPOs, the contributors come from the fields of finance, international business and management, economics, and law. The chapters cover the latest information on a range of fundamental questions that are of interest to academics, practitioners, and policymakers alike.
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 Information Risk and Long-Run Performance of Initial Public Offerings by : Frank Ecker
Download or read book Information Risk and Long-Run Performance of Initial Public Offerings written by Frank Ecker and published by Springer Science & Business Media. This book was released on 2009-02-14 with total page 146 pages. Available in PDF, EPUB and Kindle. Book excerpt: Frank Ecker examines the performance of U.S. initial public offerings (IPOs) from 1980 to 2002. He links positive and negative abnormal returns to the deviation of the realized information risk from the expected information risk. The author proposes effective measures for a long-term profitable investment strategy in IPOs.
Book Synopsis Initial Public Offerings: Findings and Theories by : Seth Anderson
Download or read book Initial Public Offerings: Findings and Theories written by Seth Anderson and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 126 pages. Available in PDF, EPUB and Kindle. Book excerpt: Initial public offerings (IPOs) play a crucial role in allocating resources in market economies. Because of the enormous importance of IPOs, an understanding of how IPOs work is fundamental to an understanding of financial markets generally. Of particular interest is the puzzling existence of high initial returns to equity IPOs in the United States and other free-market economies. Audience: Designed for use by anyone wishing to perform further academic research in the area of IPOs and by those practitioners interested in IPOs as investment vehicles.
Download or read book The IPO Decision written by Jason Draho and published by Edward Elgar Publishing. This book was released on 2004-01-01 with total page 400 pages. Available in PDF, EPUB and Kindle. Book excerpt: Annotation Initial public offerings (IPOs) garnered unprecedented positive attention in the 1990s for their spectacular returns and central role in entrepreneurial activity. Subsequent revelations of unscrupulous IPO allocation and promotion practices cast a less fa.
Book Synopsis Effects of Audit Quality on Real and Accrual Earnings Management and Subsequent Return Performance by : Mohammad Alhadab
Download or read book Effects of Audit Quality on Real and Accrual Earnings Management and Subsequent Return Performance written by Mohammad Alhadab and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We find that IPO firms engage in real and accrual earnings management during the IPO and that big-N audit firms constrain discretionary expenses-based and accrual-based manipulations. The restriction of these forms of earnings management leads IPO firms to resort to a higher level of sales-based manipulation. Our results show that both sales-based and accrual-based earnings management predict post-IPO return underperformance, and that sales-based manipulation has the most severe negative consequences for future return performance. In addition, we find IPO firms audited by big-N audit firms experience a severe decline in post-IPO return performance due to the extensive use of sales-based manipulation that takes place during the offer year.
Book Synopsis The Ernst and Young Guide to the IPO Value Journey by : Stephen C Blowers
Download or read book The Ernst and Young Guide to the IPO Value Journey written by Stephen C Blowers and published by Wiley. This book was released on 1999-10 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: A practical guide to taking your company public--successfully This updated version of the Ernst & Young Guide to Taking Your Company Public looks at the IPO as a milestone in a larger process called The Value Journeysm, the basis for the work of the Ernst & Young Center for Strategic Transactions(R), a business advisory resource for CEOs. This practical book is designed to help you determine whether an IPO is the right move for your company and addresses the major leadership challenges that CEOs face. It describes how to plan your IPO journey and chart your business strategy, focusing on the steps you must take to succeed during and after the IPO event and fulfill the critical need to continuously innovate and renew your company.
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 The ABCs of IPOs by : Robert Anthony Chechile
Download or read book The ABCs of IPOs written by Robert Anthony Chechile and published by . This book was released on 2004-04 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: "A solid advice guide that takes practical realities and necessities into account and [is] written in plain terms directly accessible to the lay reader." -Midwest Book Review Initial public offerings and other new issue securities are generally investments of choice for those who seek abnormal capital appreciation. In The ABCs of IPOs, author Robert Anthony Chechile explains the factors that can signal whether an offering will be successful by describing: Typical IPO market price behavior, as illustrated by various IPO offerings Securities regulations and the environment that necessitated their enactment Different securities markets, including the stock exchange and the multi-tiered, over-the-counter markets The underwriting process and the information required in the prospectus Evaluation techniques, including how to read a financial report and also how to determine a security's intrinsic value How to allocate investment capital to avoid gambler's remorse Selection guidelines for IPOs, limited partnerships, and convertibles The ABCs of IPOs has everything the average individual investor will need to know to succeed with new issue securities and more.
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 A Tale of Two Intermediaries by : Xianjie He
Download or read book A Tale of Two Intermediaries written by Xianjie He and published by . This book was released on 2020 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Firms undertaking an initial public offering (IPO) appoint investment bankers and auditors to certify information disclosed to investors. We examine the role that alma-mater ties between the two intermediaries play in shaping audit quality. Although some evidence suggests that information transferred via education networks may enhance economic agents' performance, other research implies that such links may admit bias into auditor judgment or impair their independence. We find that IPO firms report higher discretionary accruals when bankers and auditors are socially connected. Additional analysis suggests that this relation intensifies when issuers have stronger incentives to inflate performance, or auditors are less competent or independent. We also document that banker-auditor social ties are associated with lower earnings credibility, worse post-IPO performance, and less efficient use of the IPO proceeds. However, auditors benefit from social connections with bankers by attracting higher fee premiums and securing more future IPO-audit businesses.
Book Synopsis Abnormal Audit Fees and Audit Quality by : Patrick Krauss
Download or read book Abnormal Audit Fees and Audit Quality written by Patrick Krauss and published by . This book was released on 2015 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the economic auditor-client dependency issue by examining the association between abnormal audit fee pricing and audit quality. Our study is the first to analyze this phenomenon empirically for the institutional setting of German IFRS firms by using a sample of 2,334 firm-year observations for the period from 2005 to 2010. Our empirical results demonstrate that positive abnormal audit fees are negatively associated with audit quality and imply that the audit fee premium is a significant indicator of compromised auditor independence due to economic auditor-client bonding. Audit fee discounts generally do not lead to a reduced audit effort, or respectively, audit quality is not impaired when client bar-gaining power is strong. The association of positive abnormal audit fees and audit quality is robust to different audit quality surrogates such as absolute discretionary accruals, financial restatements, and meeting or beating analysts' earnings forecasts.
Book Synopsis Is the Abnormal Post-IPO Underperformance Really Abnormal? The Evidence from CEE Emerging Markets by : Adam Zaremba
Download or read book Is the Abnormal Post-IPO Underperformance Really Abnormal? The Evidence from CEE Emerging Markets written by Adam Zaremba and published by . This book was released on 2014 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: No, it is not. Using sorting, cross-sectional tests, regression, and tests of a monotonic relation, we investigate the long-run post-IPO performance and its sources in the Central and Eastern European (CEE) markets. We examine over 1100 stocks from 11 CEE countries for the period 2002-2014. Controlling for value, size, momentum, and the influence of microcaps, we test the performance of portfolios of age-sorted stocks. We document that “old stocks” perform significantly better than “young stocks”, but only if a market beta is the sole risk factor considered. After accounting for the size and value effects, the IPO firms do not perform either better, or worse than non-issuing companies. The sources of initial low B/M ratios of debuting companies may lie in a time-varying financial quality. The market newcomers are in much better financial shape than their older counterparts. However, over 2-5 years the fundamentals deteriorate and the financial quality regresses to the mean.
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 Choice by IPO Firms in Germany by : Hansrudi Lenz
Download or read book Auditor Choice by IPO Firms in Germany written by Hansrudi Lenz and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the auditor choices of all the IPOs of German firms between 1990 and 1999. The final sample consists of 306 firms. In the IPO context, audit quality can be used as a signal about firm value (information signalling). On the other hand, it can also be used by issuers and underwriters as a means of reducing their liability and reputation risks (insurance signalling). Larger offerings lead to increased liability and reputation risks. Our hypotheses try to differentiate between the two audit roles. The empirical results demonstrate that in the German institutional context auditor choice by IPO firms seems to be dominated by 'insurance signalling', whereas 'information signalling' seems to be of minor importance. Only in the large-deal segment IPO firms with high firm-specific risk more often choose a high-quality auditor, i.e., a Big 6 firm. Our results further support the hypothesis that only in this segment do prestigious underwriters prefer Big 6 auditors.
Book Synopsis Transparency in IPO Mechanism by : Suman Neupane
Download or read book Transparency in IPO Mechanism written by Suman Neupane and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this doctoral thesis we bring together some empirical analysis on investors' participationin initial public offering (IPOs) from a market whose characteristics are unique andsignificantly different from US and other important IPO markets. There are two importantfeatures which distinguishes the Indian IPO market. First, the Indian IPO market ischaracterised by a high level of transparency. Information on the participation of differentinvestor categories is publicly available during the offer period on a real time basis. Second, Indian IPO firms are also required to reserve and allocate pre-determined fraction of totalshares on offer to different investor categories participating in the IPO. Our first empirical study shows that the transparency in the mechanism creates highlyinelastic demand curves for a large number of IPOs. Analysis of demand over-time showsthat while institutional investors take the lead in subscribing to strong IPOs, noninstitutionalinvestors do so in weak IPOs, but perhaps not always with an honest intent. Our analysis of IPO pricing shows that favourable demand by uninformed investors ispositively associated with a high IPO price. Further, while reputed underwriters appear toexercise far more caution and restraint in setting prices, we find that in a large number ofIPOs, less reputed underwriters ignore information produced during the offer period and setthe price at the upper bound of the price range. Our findings suggest that the transparencyin allocation mechanism appears to be a double edged sword for the uninformed (retail)investors. We recommend a change in the current regulation to protect investor's welfare. We also examine the influence of the participation of different investor categories on initialreturns. Unsurprisingly, we find that while the participation of both the informed investorcategories significantly influences initial returns, the participation of retail investor lossesits significance in explaining initial returns for bookbuilding and auction IPOs. We alsoanalyse the participation of informed institutional investors to examine whether thepresence of new bank loans at the time of the IPO reduces information asymmetry. Ourresults show that presence of bank loans do not appear to reduce information asymmetry asinstitutional investors participate significantly less in IPOs with new bank loans. While thisresult is contrary to prior studies on bank loan announcements, it is consistent with a recentstudy which shows that prior studies on bank loan announcements are plagued by sampleselection issues. In our final empirical analysis we examine the participation of employees in IPOs andanalyse whether such participation can predict superior financial and operating performanceof the firm. We find that IPOs with high employee participation offer significantly higherinitial returns than IPOs with low employee participation. We also find that firms with highemployee participation in their IPOs exhibit superior post IPO operating performance. Further, we find that the prior participation of other investor categories, in particular theinstitutional investors, does not appear to influence the participation of employees in IPOs. Our results suggest that employees have valuable private information about the quality ofthe firm. The evidence presented in the study suggests that in the context of Indian IPOs, where data on investors' participation is available on a real time basis, uninformedinvestors may use information on employee participation to select well performing IPOs.
