Takeover premiums and the perception of auditor independence and reputation

Bugeja, M

Takeover premiums and the perception of auditor independence and reputation

Bugeja, M

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Publication Type:: Journal Article
Citation:: British Accounting Review, 2011, 43 (4), pp. 278 - 293
Issue Date:: 2011-12-01

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Field	Value	Language
dc.contributor.author	Bugeja, M https://orcid.org/0000-0002-1941-5092	en_US
dc.date.issued	2011-12-01	en_US
dc.identifier.citation	British Accounting Review, 2011, 43 (4), pp. 278 - 293	en_US
dc.identifier.issn	0890-8389	en_US
dc.identifier.uri	http://hdl.handle.net/10453/18913
dc.description.abstract	This study investigates if there is a positive association between takeover premiums and the bidder's perception of target firm auditor reputation and independence. Using auditor size as a proxy for auditor reputation, the results indicate that in hostile takeovers target shareholders receive a higher takeover premium when a Big 4 auditor audits the target firm prior to the takeover. This result is only significant, however, in the period prior to the highly publicised audit failures. The impact of perceived auditor independence on takeover premiums is studied using the levels and size of non-audit service (NAS) fees provided by the target firm auditor. Using three proxies for auditor independence, the results show no association between perceived auditor independence and takeover premiums. This finding is robust to partitioning the sample by auditor size, takeover hostility and splitting the sample into takeovers pre- and post- the corporate scandals that occurred in 2002. © 2011 Elsevier Ltd.	en_US
dc.relation.ispartof	British Accounting Review	en_US
dc.relation.isbasedon	10.1016/j.bar.2011.08.005	en_US
dc.subject.classification	Accounting	en_US
dc.title	Takeover premiums and the perception of auditor independence and reputation	en_US
dc.type	Journal Article
utslib.citation.volume	4	en_US
utslib.citation.volume	43	en_US
utslib.for	150102 Auditing and Accountability	en_US
utslib.for	1501 Accounting, Auditing and Accountability	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	open_access
pubs.issue	4	en_US
pubs.publication-status	Published	en_US
pubs.volume	43	en_US

Abstract:

This study investigates if there is a positive association between takeover premiums and the bidder's perception of target firm auditor reputation and independence. Using auditor size as a proxy for auditor reputation, the results indicate that in hostile takeovers target shareholders receive a higher takeover premium when a Big 4 auditor audits the target firm prior to the takeover. This result is only significant, however, in the period prior to the highly publicised audit failures. The impact of perceived auditor independence on takeover premiums is studied using the levels and size of non-audit service (NAS) fees provided by the target firm auditor. Using three proxies for auditor independence, the results show no association between perceived auditor independence and takeover premiums. This finding is robust to partitioning the sample by auditor size, takeover hostility and splitting the sample into takeovers pre- and post- the corporate scandals that occurred in 2002. © 2011 Elsevier Ltd.

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http://hdl.handle.net/10453/18913