Acquirers' abnormal returns and the non-Big 4 auditor clientele effect

• 成果类型: Article
• 署名作者: Louis, H
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2005.03.001
• 发表日期: 2005
• 关键词: STOCK RETURNS; FIRMS; acquisitions; INFORMATION; performance; QUALITY; MARKET; destruction; coefficient; lawsuits

摘要

I analyze the effect of auditor choice on acquirers' values around merger announcements and the factors affecting the interaction between auditor size and the market reaction to merger announcements. I find that acquirers audited by non-Big 4 accounting firms outperform those audited by Big 4 firms. This effect is more pronounced when the targets are privately held and when the likelihood of the auditors playing a prominent advisory role increases. While the largest auditing firms are usually assumed to offer superior services, the study suggests that smaller firms have a comparative advantage in assisting their clients in merger transactions. (c) 2005 Elsevier B.V. All rights reserved.