Audit quality and post earnings announcement drift

Ferguson, AC; Matolcsy, ZP

Audit quality and post earnings announcement drift

Ferguson, AC

Matolcsy, ZP

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Publisher:: City University of Hong Kong
Publication Type:: Journal Article
Citation:: Asia-Pacific Journal of Accounting and Economics, 2004, 11 (2), pp. 121 - 137
Issue Date:: 2004-01

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Field	Value	Language
dc.contributor.author	Ferguson, AC https://orcid.org/0000-0003-0535-0643	en_US
dc.contributor.author	Matolcsy, ZP https://orcid.org/0000-0001-6566-5079	en_US
dc.date.issued	2004-01	en_US
dc.identifier.citation	Asia-Pacific Journal of Accounting and Economics, 2004, 11 (2), pp. 121 - 137	en_US
dc.identifier.issn	1608-1625	en_US
dc.identifier.uri	http://hdl.handle.net/10453/6448
dc.description.abstract	This study examines the value of audit quality in the capital markets setting. We argue that higher quality auditors are associated with lower post-earnings announcement drift (PEAD). Results show that clients of brand name auditors exhibit lower PEAD than small auditors, but only weak auditor industry specialist effects are identified. PEAD also differs for clients of individual Big 6/5 auditors, with clients of the smaller Arthur Andersen and Deloittes exhibiting greater PEAD, consistent with the DeAngelo (1981) size hypothesis. Finally, PWC exhibits higher PEAD in 1998, suggesting market uncertainty about quality implications of audit market structural change.	en_US
dc.publisher	City University of Hong Kong	en_US
dc.relation.ispartof	Asia-Pacific Journal of Accounting and Economics	en_US
dc.relation.isbasedon	10.1080/16081625.2004.10510639	en_US
dc.title	Audit quality and post earnings announcement drift	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	11	en_US
utslib.for	150103 Financial Accounting	en_US
utslib.for	14 Economics	en_US
utslib.for	15 Commerce, Management, Tourism and Services	en_US
dc.location.activity	Boston, MA
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.consider-herdc	true	en_US
pubs.issue	2	en_US
pubs.volume	11	en_US

Abstract:

This study examines the value of audit quality in the capital markets setting. We argue that higher quality auditors are associated with lower post-earnings announcement drift (PEAD). Results show that clients of brand name auditors exhibit lower PEAD than small auditors, but only weak auditor industry specialist effects are identified. PEAD also differs for clients of individual Big 6/5 auditors, with clients of the smaller Arthur Andersen and Deloittes exhibiting greater PEAD, consistent with the DeAngelo (1981) size hypothesis. Finally, PWC exhibits higher PEAD in 1998, suggesting market uncertainty about quality implications of audit market structural change.

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http://hdl.handle.net/10453/6448