Do Industry-Specialist Auditors Influence Stock Price Crash Risk?

Do Industry-Specialist Auditors Influence Stock Price Crash Risk?
Author: Ashok Robin
Publisher:
Total Pages: 43
Release: 2014
Genre:
ISBN:
GET BOOK

Download Do Industry-Specialist Auditors Influence Stock Price Crash Risk? Book in PDF, Epub and Kindle

Francis (2011) calls for more research on “the effect of audit quality on economic outcomes.” We respond by examining whether high-quality auditors reduce stock price crash risk, an important consideration for stock investors. We argue that high-quality auditors reduce crash risk because of their information intermediary and corporate governance roles. Using a large sample of U.S. stocks spanning the period 1990-2009, we examine the issue empirically by using auditor industry specialization as our proxy for auditor quality. Our main finding is a statistically significant and negative association between auditor industry specialization and stock price crash risk, implying that high-quality auditors can directly benefit investors by reducing tail risk. In addition, we provide evidence that industry-specialist auditors moderate the effects of opacity, accounting conservatism, and tax avoidance on crash risk. Finally, our main finding of a negative relation between auditor industry specialization and crash risk is robust to using city-level industry specialization as an alternate measure.

Engagement Auditor Industry Specialization and Stock Price Crash Risk

Engagement Auditor Industry Specialization and Stock Price Crash Risk
Author: Hua Feng
Publisher:
Total Pages: 55
Release: 2017
Genre:
ISBN:
GET BOOK

Download Engagement Auditor Industry Specialization and Stock Price Crash Risk Book in PDF, Epub and Kindle

We investigate the effects of engagement auditor industry specialization on stock price crash risk. Although research on audit partners has been growing, we are not aware of any prior studies that investigate partner-level specialization and crash risk. Using a large sample of Chinese stocks spanning the period 2003-2015, we find a statistically significant and negative association between auditor industry specialization and stock price crash risk. Our mediation tests suggest that audit partner industry specialization decreases the risk of price crash by mitigating earnings manipulation. We further document that the negative association is more pronounced for firms that switch from non-specialist audit partners to specialist audit partners. We also find some evidence that audit partners' personal characteristics moderate the association between partner specialization and crash risk. Our results remain robust to alternative measures of partner specialization.

Audit Partner Specialization and Future Stock Price Crash Risk

Audit Partner Specialization and Future Stock Price Crash Risk
Author: Ahsan Habib
Publisher:
Total Pages:
Release: 2017
Genre:
ISBN:
GET BOOK

Download Audit Partner Specialization and Future Stock Price Crash Risk Book in PDF, Epub and Kindle

We investigate the association between audit partner industry specialization and future stock price crash risk. Although research on audit partners has been growing, we are not aware of any prior studies that investigate partner-level specialization and crash risk. Using a large sample of Chinese stocks spanning the period 2000-2015, we find a statistically significant and negative association between auditor industry specialization and stock price crash risk. The result is consistent with the proposition that high quality auditors constrain bad news hoarding by managers. We further document that the negative association is more pronounced for firms who switch from non-specialist audit partners to specialist audit partners. We also find some evidence that audit partners' personal characteristics moderate the association between partner specialization and crash risk. Our results remain robust to alternative measures of partner specialization and to controls for endogeneity.

Auditor-Provided Tax Services and Stock Price Crash Risk

Auditor-Provided Tax Services and Stock Price Crash Risk
Author: Ahsan Habib
Publisher:
Total Pages:
Release: 2016
Genre:
ISBN:
GET BOOK

Download Auditor-Provided Tax Services and Stock Price Crash Risk Book in PDF, Epub and Kindle

This paper examines whether auditor-provided tax services affect stock price crash risk: an important consideration for stock investors. Provision of tax services by incumbent auditors could accentuate or attenuate crash risk depending on whether such services give rise to knowledge spillover or impair auditor independence. The study investigates two channels through which tax services might affect crash risk: earnings management in tax expenses, and tax avoidance. Also examined, is whether the association between tax services and crash risk is moderated by the particular business strategy that organizations pursue. A two-stage model is used to control for the potential endogeneity inherent in the selection of auditors for tax services. Empirical findings reveal that auditor-provided tax services attenuate crash risk by constraining both earnings management in tax expenses and tax avoidance. Further evidence shows that auditor-provided tax services reduce crash risk for firms following innovator business strategies. Taken together, empirical findings reported in this study support knowledge spillover benefits, i.e. insights gained from tax services can enhance audit effectiveness.

Proceedings of the 3rd International Conference on Economic Development and Business Culture (ICEDBC 2023)

Proceedings of the 3rd International Conference on Economic Development and Business Culture (ICEDBC 2023)
Author: Shehnaz Tehseen
Publisher: Springer Nature
Total Pages: 821
Release: 2023-10-27
Genre: Business & Economics
ISBN: 9464632461
GET BOOK

Download Proceedings of the 3rd International Conference on Economic Development and Business Culture (ICEDBC 2023) Book in PDF, Epub and Kindle

This is an open access book.The 3rd International Conference on Economic Development and Business Culture (ICEDBC 2023) will be held in Dali on June 30–July 2, 2023. ICEDBC 2023 is annual conference since 2021. It was held in Xiamen, Dali from 2021 to 2022. Every year, there are many attendees from Asia, Europe, America, etc., and quite a few well-known experts give plenary speeches. Business culture is an organic and important part of the social culture system, it is the comprehensive reflection and expression of national culture and modern consciousness in business behavior, and is formed under the influence of national culture and modern consciousness with modern business characteristics and group consciousness as well as the behavior norms generated by this consciousness. For business, one hand on the economy, the other on culture, will certainly promote China's business towards modernization in a big step. The day when business culture is flourishing is the day when business economy is flourishing. Business culture plays a fundamental and decisive role in economic development, providing adequate basic support and supporting services for business activities. Business culture regulates business behavior, regulates business relationships, and influences the way of thinking in economic operation. Business culture promotes economic development through the shaping of people's pattern realm, entrepreneurship and integrity spirit. Business culture plays the role of "adhesive, catalyst and lubricant" for economic development by constructing and practicing value creation in business management and business transactions. ICEDBC2023 aims to explore the role of business culture in promoting economic development and to thoroughly analyze how to use its economic functions more effectively. ICEDBC 2023 warmly invite you to participate in and look forward to seeing you in Dali, China.

Crash Risk and the Auditor-Client Relationship

Crash Risk and the Auditor-Client Relationship
Author: Jeffrey L. Callen
Publisher:
Total Pages:
Release: 2016
Genre:
ISBN:
GET BOOK

Download Crash Risk and the Auditor-Client Relationship Book in PDF, Epub and Kindle

This study examines whether the term of the auditor-client relationship (i.e., auditor tenure) is associated with future stock price crash risk measured both ex ante and ex post. Using a large sample of U.S. public firms with Big Four auditors, we find robust evidence that auditor tenure is negatively related to one-year-ahead stock price crash risk. The evidence is consistent with monitoring-by-learning where development of client-specific knowledge over the term of the auditor-client relationship enhances auditors' ability to detect and deter bad news hoarding activities by clients, thereby reducing future crash risk. This result holds even after controlling for endogeneity of the tenure/crash risk relation. We further provide evidence indicating that option market investors do not fully incorporate the information contained in the term of auditor-client relationship in predicting future stock price crash risk. Our empirical results have important policy implications for regulators concerned with ensuring auditor independence.

Tax Avoidance Research

Tax Avoidance Research
Author: Antonio De Vito
Publisher: Springer Nature
Total Pages: 185
Release:
Genre:
ISBN: 3031517652
GET BOOK

Download Tax Avoidance Research Book in PDF, Epub and Kindle

Digitalisation: Opportunities and Challenges for Business

Digitalisation: Opportunities and Challenges for Business
Author: Bahaaeddin Alareeni
Publisher: Springer Nature
Total Pages: 899
Release: 2023-03-27
Genre: Technology & Engineering
ISBN: 303126956X
GET BOOK

Download Digitalisation: Opportunities and Challenges for Business Book in PDF, Epub and Kindle

This book addresses the implications of technology, entrepreneurship, and business ‎‎development gadgets ‎for applications in societies. In this book proceedings, we attempt to address the importance and impact of digitalization and ‎on business development in the context ‎of economic ‎diversity, that is through various propositions of ‎modern technology and entrepreneurial ‎actions, and through the lens of case studies, experiments, empirical ‎assessments, just to name a ‎few research methodological stances and approaches.‎ This book highlights a range of topics in the fields of technology, ‎entrepreneurship, business administration, accounting, and economics that can contribute to business ‎development in developing countries, such as learning machines, artificial intelligence, big data, ‎deep ‎‎learning, game-based learning, management information system, ‎accounting information ‎system, knowledge management, entrepreneurship and social enterprise, corporate social responsibility and sustainability, business policy and strategic management, international management and organizations, organizational behavior and HRM, operations management and logistics research, controversial issues in management and organizations, turnaround, corporate entrepreneurship, and innovation, legal issues, business ethics, and firm governance, and firm financial affairs, non-traditional research, and creative methodologies. This book is ideal for academicians, activists, curriculum ‎developers, researchers, professionals, administrators, and policymakers. The readers of this book could gain an up-to-date know-how on state-of-the-modern technology, entrepreneurship, and business development and achievements in this regard from the research standpoint of view.

Auditing the Auditors and Stock Crashes

Auditing the Auditors and Stock Crashes
Author: Qingyuan Li
Publisher:
Total Pages: 60
Release: 2019
Genre:
ISBN:
GET BOOK

Download Auditing the Auditors and Stock Crashes Book in PDF, Epub and Kindle

We investigate the impact of the initiations of national audit inspection programs on firm-specific stock crash risk in 38 countries worldwide. The staggered commencement of the inspection regimes in different countries allows us to identify the causal effect of audit quality on crash risk. We find a significant decrease (32.39%) in a firm's crash risk subsequent to the initiations of audit inspections. This negative effect is stronger for auditors with smaller size, limited industry expertise, and longer tenure. We further explore the mechanisms through which audit inspections affect crash risk. We find that the effect of inspection programs on crash risk is driven by client firms facing higher ex ante inspection risk, as well as client firms in which auditors play an important role in monitoring managers.