The market reaction to Arthur Andersen's role in the Enron scandal: Loss of reputation or confounding effects?

• 成果类型: Article
• 署名作者: Nelson, Karen K.; Price, Richard A.; Rountree, Brian R.
• 署名单位: Rice University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2008.09.001
• 发表日期: 2008
• 关键词: auditor reputation; client firms; earnings; returns; QUALITY; IMPACT; simulation; valuation; issues; RISK

摘要

This paper tests the hypothesis that negative client stock returns following the revelation that Enron documents had been shredded are attributable to confounding effects as opposed to a loss of Andersen's reputation. We find that a sharp decline in oil prices along with differences in the industry composition of the Andersen and Big 4 client portfolios combine to produce significantly more negative returns for Andersen clients relative to Big 4 clients, and for Andersen's Houston office clients relative to its clients in other locations. The market reaction to two other Enron-related events also offers little support for a reputation effect. (C) 2008 Elsevier B.V. All rights reserved.