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Industry Specialist Auditors, SEO Underpricing, and the Global Financial Crisis
| Content Provider | Semantic Scholar |
|---|---|
| Author | Park, Jongwon Yu, Jaeyoon |
| Copyright Year | 2015 |
| Abstract | This study examines whether auditor industry specialization plays a significant role in reducing clients’ seasoned equity offering (SEO) underpricing. From 1,249 SEO samples covering 2001 to 2008, we find a significant and negative association between auditor industry specialization and SEO underpricing. Typically, underpricing decreases by 23.1% when the issuing firm is audited by industry specialists. We then extend our sample period to 2013 to examine whether the market evaluation of auditor industry specialization significantly changes after the onset of the global financial crisis (GFC). Our results show that the negative association between auditor industry specialization and SEO underpricing loses its statistical significance in the post-crisis period. These findings suggest that the market suspicion of the auditor’s role as a market ‘watchdog’ leading up to the GFC significantly altered investors’ perceptions of auditors and thus impaired the market evaluation of industry specialist auditors. |
| File Format | PDF HTM / HTML |
| DOI | 10.2139/ssrn.2571566 |
| Alternate Webpage(s) | http://www.kaa-edu.or.kr/online3/2015_1/201501_journal/1.%20Jongwon%20Park.pdf |
| Alternate Webpage(s) | https://doi.org/10.2139/ssrn.2571566 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
