When Auditors Say 'No,' Does the Market Listen?

doi:10.1080/09638180.2019.1597746

CORC > 上海财经大学 > 上海财经大学

	When Auditors Say 'No,' Does the Market Listen?
	Chen, Shimin 1; Hu, Bingbing 2; Wu, Donghui 3; Zhao, Ziye 4
刊名	EUROPEAN ACCOUNTING REVIEW
	2019-04-05
关键词	Audit modifications Information content Capital market efficiency
ISSN号	0963-8180
DOI	10.1080/09638180.2019.1597746
英文摘要	Previous research on whether the market responds to auditors' opinions has provided mixed results. We revisit this issue in China, where individual investors who are more likely to neglect value-relevant information dominate the stock market. In addition to going concern opinions (GCOs), China permits modified audit opinions (MAOs) on violations of accounting standards or disclosure rules (GAAP/DISC MAOs), providing an opportunity not available in the literature to enrich the study of audit-opinion pricing. We find that, ceteris paribus, MAO recipients underperform in the future and have a higher incidence of adverse outcomes such as misreporting and stock delisting, and the market reacts negatively to MAOs during the short window around MAO disclosure. Importantly, MAO disclosure is not followed by negative long-term stock returns, suggesting stock price adjustments to MAOs are speedy and unbiased. These findings hold for both GCOs and GAAP/DISC MAOs. Together, our findings support the informativeness of audit opinions and cast doubt on the argument that investors inefficiently price audit opinions due to information-processing bias.
WOS研究方向	Business & Economics
语种	英语
出版者	ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
WOS记录号	WOS:000465721700001
内容类型	期刊论文
源URL	[http://10.2.47.112/handle/2XS4QKH4/288]
专题	上海财经大学
通讯作者	Wu, Donghui
作者单位	1.China Europe Int Business Sch, Dept Finance & Accounting, Shanghai, Peoples R China; 2.Hong Kong Baptist Univ, Dept Accountancy & Law, Hong Kong, Peoples R China; 3.Chinese Univ Hong Kong, Sch Accountancy, Hong Kong, Peoples R China; 4.Shanghai Univ Finance & Econ, Sch Accountancy, Shanghai, Peoples R China
推荐引用方式 GB/T 7714	Chen, Shimin,Hu, Bingbing,Wu, Donghui,et al. When Auditors Say 'No,' Does the Market Listen?[J]. EUROPEAN ACCOUNTING REVIEW,2019.
APA	Chen, Shimin,Hu, Bingbing,Wu, Donghui,&Zhao, Ziye.(2019).When Auditors Say 'No,' Does the Market Listen?.EUROPEAN ACCOUNTING REVIEW.
MLA	Chen, Shimin,et al."When Auditors Say 'No,' Does the Market Listen?".EUROPEAN ACCOUNTING REVIEW (2019).