Auditor Reputation, Auditor Independence and the Underpricing of IPOs

We investigate the effect of reputation and independence of auditors on IPO underpricing. Auditor reputation and independence may reduce asymmetric information that exists between companies going public and external investors, therefore decreasing IPO underpricing. Multi-variable regression analysis...

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Bibliographic Details
Published inThe journal of applied business and economics Vol. 20; no. 6; pp. 30 - 39
Main Authors Chen, Kai, Lin, Anna, Siregar, Dona
Format Journal Article
LanguageEnglish
Published Thunder Bay North American Business Press 01.10.2018
Subjects
Accountant independence
Accounting
Accounting firms
Audit fees
Audit quality
Auditing
Auditors
Audits
Corporate image
Fees & charges
Financial management
Financial statements
Going public
Hypotheses
Initial public offerings
Literature reviews
Nonaudit services
Quality
Reputations
Strategic management
Studies
Underwriting
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Summary:We investigate the effect of reputation and independence of auditors on IPO underpricing. Auditor reputation and independence may reduce asymmetric information that exists between companies going public and external investors, therefore decreasing IPO underpricing. Multi-variable regression analysis of a sample consisting of IPOs from the period around SOX is performed. Results show that auditor independence does, but auditor reputation does not, reduce IPO underpricing.
ISSN:1499-691X
1499-691X
DOI:10.33423/jabe.v20i6.370