Market reactions to auditor switches under regulatory consent and market driven regimes

Ferguson, A; Lam, P; Ma, N

Market reactions to auditor switches under regulatory consent and market driven regimes

Ferguson, A

Lam, P

Ma, N

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Publication Type:: Journal Article
Citation:: Journal of Contemporary Accounting and Economics, 2018, 14 (2), pp. 197 - 215
Issue Date:: 2018-08-01

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Field	Value	Language
dc.contributor.author	Ferguson, A https://orcid.org/0000-0003-0535-0643	en_US
dc.contributor.author	Lam, P https://orcid.org/0000-0001-5386-3705	en_US
dc.contributor.author	Ma, N https://orcid.org/0000-0002-0341-1003	en_US
dc.date.available	2020-05-29T19:03:59Z
dc.date.issued	2018-08-01	en_US
dc.identifier.citation	Journal of Contemporary Accounting and Economics, 2018, 14 (2), pp. 197 - 215	en_US
dc.identifier.issn	1815-5669	en_US
dc.identifier.uri	http://hdl.handle.net/10453/131166
dc.description.abstract	© 2018 Elsevier Ltd We examine market reactions to announcements of auditor switches by Australian-listed companies during the ‘regulatory consent’ period (2000–2011) under which auditor resignations require consent by the corporate regulator before taking effect at annual general meetings. Overall, we find no clear evidence of significant market responses to firms announcing auditor switches, consistent with a lack of information content or potential information leakage argument. However, examination of a more recent sample in the ‘partial deregulation’ period (2015–2017), whereby timing and consent provisions have been relaxed under a more market-driven regime, uncovers univariate evidence of market reactions directionally consistent with the audit quality interpretation. Overall, these results provide support for the regulator's recent initiative to deregulate the auditor resignation process in Australia to become more disclosure driven as in other jurisdictions.	en_US
dc.relation.ispartof	Journal of Contemporary Accounting and Economics	en_US
dc.relation.isbasedon	10.1016/j.jcae.2018.05.001	en_US
dc.title	Market reactions to auditor switches under regulatory consent and market driven regimes	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	14	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	14	en_US

Abstract:

© 2018 Elsevier Ltd We examine market reactions to announcements of auditor switches by Australian-listed companies during the ‘regulatory consent’ period (2000–2011) under which auditor resignations require consent by the corporate regulator before taking effect at annual general meetings. Overall, we find no clear evidence of significant market responses to firms announcing auditor switches, consistent with a lack of information content or potential information leakage argument. However, examination of a more recent sample in the ‘partial deregulation’ period (2015–2017), whereby timing and consent provisions have been relaxed under a more market-driven regime, uncovers univariate evidence of market reactions directionally consistent with the audit quality interpretation. Overall, these results provide support for the regulator's recent initiative to deregulate the auditor resignation process in Australia to become more disclosure driven as in other jurisdictions.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/131166