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Audit Quality 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 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 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 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 Empirical Evidence on IPO-Underpricing by : Marius Hamer
Download or read book Empirical Evidence on IPO-Underpricing written by Marius Hamer and published by GRIN Verlag. This book was released on 2008 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: Diploma Thesis from the year 2007 in the subject Business economics - Investment and Finance, grade: 1,3, European Business School - International University Schlo Reichartshausen Oestrich-Winkel, 80 entries in the bibliography, language: English, abstract: This paper aims at establishing a link between the average level of initial return of IPO shares, existing underpricing explanations and the dot-com bubble. In years prior to the boom of the new economy, underpricing was explained by various theories, which have extensively been developed since decades. However, in the years 1998 to 2001 IPOs were overly underpriced, leading to assumptions about behavioural aspects and investor irrationality. Analysing a comprehensive dataset of 371 IPOs on the Frankfurter B rse between 1997 and 2007, this paper aims at providing evidence that the observed lower levels of initial returns in recent years can indeed be aligned with existing theories on the basis of rational behaviour of market participants. Firstly, the IPO process and its major participants will be presented followed by a review of relevant studies on the IPO phenomenon. In the next step, established underpricing theories are recapitulated. A descriptive analysis of the data sample points out the particularities concerning the company and transaction characteristics of the sample firms. In a last step, a regression analysis relates various proxies for information asymmetry to established underpricing theories. It gives reason to believe that the irrationality at the turn of the century has vanished and that underpricing can again be explained by established theories.
Book Synopsis The Phenomenon of IPO Underpricing in the European and U.S. Stock Markets by : Oliver Reiche
Download or read book The Phenomenon of IPO Underpricing in the European and U.S. Stock Markets written by Oliver Reiche and published by Anchor Academic Publishing (aap_verlag). This book was released on 2014-06-23 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Initial Public Offering (IPO) marks one of the most important events of a company. Basically, the aim is to generate maximum proceeds by selling the company’s shares to investors. However, the shares that are sold seem to be underpriced as the price significantly soars on the first trading day. Since the very first detection of this phenomenon in the United States in 1969, several subsequent studies have documented the existence of worldwide IPO underpricing. This study focuses on IPO Underpricing in the European and United States Stock Markets by outlining and discussing the following essential issues: What is underpricing in the context of the IPO? Which motivations are there and how do they impact? Is there IPO underpricing in the markets of Europe and the United States of America?
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 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 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.
Download or read book Audit Quality written by Jonas Tritschler and published by Springer Science & Business Media. This book was released on 2013-10-31 with total page 251 pages. Available in PDF, EPUB and Kindle. Book excerpt: Arising from the author’s experience as a practicing CPA, this book is quite different from other research in this field, as it confronts the subject of audit quality from a pragmatic perspective. The first goal of Jonas Tritschler is to develop an audit quality metric on national audit firm level. Financial reporting errors, as detected by the German enforcement institutions during examinations, which subsequently are published in the German Federal Gazette by the involved companies, are the data basis for this measurement. Using the developed audit quality metric, the second goal of this study is to analyze audit quality differences of selected audit firms by comparing their deployed audit input factors such as employee’s competence (ratio of certified professionals to total audit staff), experience of employees (average tenure of employees in years) and client-specific experience (client fluctuation rate). Results indicate a correlation between audit quality according to the developed metric and the operationalized audit input factors mentioned above.
Book Synopsis Capital Market Consequences of Audit Partner Quality by : Daniel Aobdia
Download or read book Capital Market Consequences of Audit Partner Quality written by Daniel Aobdia and published by . This book was released on 2015 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether the identity of the individual audit partners provides informational value to capital market participants beyond the value provided by the identity of the audit firms. Using data from Taiwan, where firms are mandated to disclose the names of the engagement partners, we find a positive association between the partner's quality and the client firm's earnings response coefficient. We also find a positive market reaction when a firm replaces a lower quality partner with a higher quality one. Moreover, we find evidence that firms audited by higher quality partners experience smaller Initial Public Offering (IPO) underpricing and are able to obtain better debt contract terms. Overall, these results suggest that the quality of engagement partners matters to capital market participants.
Book Synopsis Earnings Quality and International IPO Underpricing by : Thomas Jason Boulton
Download or read book Earnings Quality and International IPO Underpricing written by Thomas Jason Boulton and published by . This book was released on 2014 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the impact of country-level earnings quality on IPO underpricing. Examining 10,783 IPOs from 37 countries, we find that IPOs are underpriced less in countries where public firms produce higher quality earnings information. This finding persists after controlling for other deal- and country-specific factors that affect IPO underpricing, and it is driven neither by the large and relatively transparent markets in the U.S. and U.K. nor by the relatively opaque Japanese market. The impact of low earnings quality on underpricing is partially offset by the use of a top-tier underwriter.
Book Synopsis Audit Quality and Earnings Management for Taiwan IPO Firms by : Ken Y. Chen
Download or read book Audit Quality and Earnings Management for Taiwan IPO Firms written by Ken Y. Chen and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - This paper investigates the relationship between audit quality (as measured by auditor size and industry specialization) and earnings management (as measured by unexpected accruals) for Taiwan IPO firms.Design/methodology/approach - First uses unexpected accruals in the modified Jones model to measure earnings management in the IPO process. Then uses auditor type (big five versus non-big five) and industry specialist to measure audit quality. The hypothesis predicts that Taiwanese firms with higher quality auditors engage less in earnings management in the IPO process. The sample consists of 367 new issues between 1999 and 2002 from the Taiwan Economic Journal database.Findings - It is found that big five auditors are related to less earnings management in the IPO year in Taiwan. This shows that higher quality auditors constrain earnings management for Taiwan IPO firms.Research limitations/implications - The finding shows that high quality auditors constrain earnings management and provide more precise information. This is important, given that management has incentive to engage in earnings management in the IPO process to garner greater proceeds and at-issue earnings management is negatively related to post-issue earnings performance and stock returns.Practical implications - The research might be of interest to investors in IPO firms, given that at-issue unexpected accruals are opportunistic.Originality/value - The study contributes to the literature in that it shows that audit firm size is an important determinant in earnings management for Taiwan IPO firms.
Book Synopsis Relationship Between Management Quality and IPO Underpricing by : 張文心
Download or read book Relationship Between Management Quality and IPO Underpricing written by 張文心 and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Association Between Audit Quality, Retained Ownership, and Firm Specific Risk in U.S. Vs. Canadian IPO Markets by : Peter Clarkson
Download or read book The Association Between Audit Quality, Retained Ownership, and Firm Specific Risk in U.S. Vs. Canadian IPO Markets written by Peter Clarkson and published by . This book was released on 1990 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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:
