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National Firms (national + firm)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting75%

Selected Abstracts

Demand and Supply of Auditing in IPOs: An Empirical Analysis of the Québec Market

INTERNATIONAL JOURNAL OF AUDITING, Issue 3 2000
Jean Bédard
This study examines the factors affecting the demand for higher-quality auditors at the time of an initial public offering in a small market characterized by low-litigation risk, government subsidies for companies going public, and the presence of large non-Big Six auditors, namely, the Canadian province of Québec. Our results, from an analysis of 212 Québec IPOs between 1983 and 1997, indicate that the choice of an auditor at the time of an IPO is significantly affected by the company's risk, size, and geographical dispersion. They also suggest that the Québec audit market is segmented between three types of service providers: the Big Six, the National firms and the Local firms. Local firms audit small local companies with low risk, National firms audit large local companies with moderate risk, and the Big Six audit large geographically dispersed companies with high risk. [source]

IPO Underpricing and Audit Quality Differentiation within Non-Big 5 Firms

INTERNATIONAL JOURNAL OF AUDITING, Issue 2 2007
Susan M. Albring
The choice of a non-Big 5 audit firm is optimal for some IPO companies. The choice of audit firm is important because auditor reputation may influence the pricing of the offering. This paper investigates the relationship between IPO underpricing and auditor compensation and proxies for non-Big 5 audit quality. We develop a continuous measure of auditor reputation based on factor analysis. This measure of auditor reputation is associated with lower IPO underpricing and higher auditor compensation, suggesting that auditor quality is an important determinant for firms hiring non-Big 5 auditors. We also examine the underlying constructs for auditor quality to determine their separate effects on IPO underpricing and auditor quality. Non-Big 5 national firms are associated with lower underpricing and higher auditor compensation, suggesting that these firms are perceived to be quality differentiated from non-national firms. SEC experience for non-national firms is associated with higher audit fees, suggesting this experience is perceived to be valuable. [source]

Bank Mergers in Europe: The Public Policy Issues

JCMS: JOURNAL OF COMMON MARKET STUDIES, Issue 3 2000
Jean Dermine
A very large merger wave in the banking industry has taken place in Europe over the last 15 years. Public policy-makers need to assess how bank mergers , be they domestic intra-industry, across-industry, or cross-border , affect their mission of protecting investors and ensuring financial stability, an appropriate level of competition, and the competitiveness of national firms. Moreover, as the banking world is becoming increasingly international, there is a need to reassess the structure of bank regulation and supervision which has been assumed historically by each nation-state. [source]

Do Expert Informational Intermediaries Add Value?

JOURNAL OF ACCOUNTING RESEARCH, Issue 4 2003
Evidence from Auditors in Microcap Initial Public Offerings
Do expert informational intermediaries add value? We address this question by examining the informativeness of the audit report contained in the prospectus associated with a firm's initial public offering (IPO). At the time of the IPO, there is a relative lack of information to facilitate the establishment of equity values, suggesting that the information provided by outside "experts" (e.g., auditors, underwriters) is particularly important. In this article we study small, non-venture-backed IPOs, a segment of the market with the poorest long-run performance and where the prestigious audit firm is often the sole (if any) expert present. We find that the pre-IPO opinions of larger auditors are more predictive of post-IPO negative stock delistings. Of particular note, the opinions of the national-tiered firms are comparably predictive to those of the Big 6, though this finding emerges only after we consider the selectivity-based differences in the clients that hire these national firms. Our findings also indicate that, for larger auditors the presence of a pre-IPO going-concern opinion is more strongly associated with first-year stock returns and that larger auditors are more likely to give such opinions to their distressed clients. Overall, we address a deficiency in the literature relating to "the paucity of evidence on the value of auditor opinions to investors" (Healy and Palepu [ 2001 p. 415]). [source]