Third-party consequences of short-selling threats: The case of auditor behavior

• 成果类型: Article
• 署名作者: Hope, Ole-Kristian; Hu, Danqi; Zhao, Wuyang
• 署名单位: University of Toronto; BI Norwegian Business School; Northwestern University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2016.09.006
• 发表日期: 2017
• 关键词: SHORT-SELLERS; LITIGATION RISK; ceo overconfidence; market quality; stock returns; fees evidence; PRICE TESTS; SHORT-SALES; constraints; INFORMATION

摘要

This study examines how short-selling threats affect auditors. During 2005-2007, the SEC ordered a pilot program in which one-third of the Russell 3000 index firms were arbitrarily chosen to be exempted from short-sale price tests. As a result, these stocks faced significantly higher short-selling threats. We implement a difference-in-differences test with firm fixed effects to show that auditors react to the increased threats and charge higher audit fees to the pilot firms. Further, we find that the impact only exists when auditors are concerned with the bankruptcy risk or when managers are less likely disciplined by short sellers. (C) 2016 Elsevier B.V. All rights reserved.