2018-02-01
The effect of industry-specialist auditors on SEO underpricing before and after the global financial crisis
Publication
Publication
Auditing: a journal of practice and theory , Volume 37 - Issue 1 p. 89- 113
This study examines whether auditors’ industry expertise is negatively associated with underpricing of seasoned equity offerings (SEO) and whether the association between auditors’ industry expertise and SEO underpricing changes around the global financial crisis (GFC). Using a sample of 2,028 SEO observations from 2001 to 2013, we document that in the pre-GFC period, auditors’ industry expertise is negatively associated with SEO underpricing, but not during the post-GFC period. Industry-specialist auditors are also associated with higher earnings response coefficients in the pre-GFC period, but not in the post-GFC period. These results suggest that the GFC affected investor confidence in industry-specialist auditors in the capital markets.
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doi.org/10.2308/ajpt-51779, hdl.handle.net/1765/104592 | |
ERIM Top-Core Articles | |
Auditing: a journal of practice and theory | |
Organisation | Erasmus Research Institute of Management |
Kwon, S. Y., Park, J., & Yu, J. (2018). The effect of industry-specialist auditors on SEO underpricing before and after the global financial crisis. Auditing: a journal of practice and theory, 37(1), 89–113. doi:10.2308/ajpt-51779 |