Auditor resignations: clientele effects and legal liability
成果类型：
Article
署名作者：
Shu, SZ
署名单位：
Boston College
刊物名称：
JOURNAL OF ACCOUNTING & ECONOMICS
ISSN/ISSBN：
0165-4101
发表日期：
2000
关键词：
摘要：
I examine two hypotheses of auditor resignation: litigation risk and clientele adjust ment. I find resignation is positively related to increased client legal exposure, and to occurrence of clientele mismatch. The summary-measure approach allows me to distinguish clientele mismatch caused by changes in auditor (supply-side) characteristics vs. changes in client (demand-side) characteristics. Evidence suggests resignation is likely driven by supply-side changes. I also find investors react negatively to resignations, and the price drop varies cross-sectionally with litigation risk. Further, the tendency of dropped firms to engage small auditors is positively related to increased litigation risk, and to mismatch with large auditors. (C) 2000 Elsevier Science B.V. All rights reserved.