Securities-Based Crowdfunding by Startups: Does Auditor Attestation Matter?

• 成果类型: Article
• 署名作者: Gong, Jing; Krishnan, Jayanthi; Liang, Yi
• 署名单位: Lehigh University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0412
• 发表日期: 2022
• 页码: 213-239
• 关键词: Litigation risk; JOBS Act; QUALITY; debt; fees; differentiation; INDEPENDENCE; association; OWNERSHIP; assurance

摘要

We examine financing outcomes for small businesses seeking to sell public securities in a setting characterized by high information asymmetry, weak requirements for auditor participation, and a complete absence of Big N auditors. Issuers that raise capital from small, unsophisticated investors through crowdfunding, under the Securities and Exchange Commission's Regulation Crowdfunding (RegCF), often need no auditor attestation or need only weak attestation in the form of reviews, not audits, of their financial statements. We find that auditor reviews are positively associated with both the probability of crowdfunding success and the total amount raised. Further, we compare outcomes for issuers that procure auditor reviews voluntarily and mandatorily, and document that issuers with voluntary reviews have better outcomes. We conjecture that for issuers that voluntarily procure reviews, the reviews serve as signals of high future prospects. Finally, the positive effect of reviews is concentrated in PCAOB-registered auditors.