Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7356989 | Journal of Contemporary Accounting & Economics | 2018 | 49 Pages |
Abstract
We examine market reactions to announcements of auditor switches by Australian-listed companies during the 'regulatory consent' period (2000-2011) under which auditor resignations require consent by the corporate regulator before taking effect at annual general meetings. Overall, we find no clear evidence of significant market responses to firms announcing auditor switches, consistent with a lack of information content or potential information leakage argument. However, examination of a more recent sample in the 'partial deregulation' period (2015-2017), whereby timing and consent provisions have been relaxed under a more market-driven regime, uncovers univariate evidence of market reactions directionally consistent with the audit quality interpretation. Overall, these results provide support for the regulator's recent initiative to deregulate the auditor resignation process in Australia to become more disclosure driven as in other jurisdictions.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business, Management and Accounting (General)
Authors
Andrew Ferguson, Peter Lam, Nelson Ma,