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- Title
Market Reaction to Auditor Changes by OTC Companies.
- Authors
Eichenseher, John W.; Hagigi, Moshe; Shields, David
- Abstract
This study examines capital market price movements surrounding the announcement of auditor change by U.S. corporations whose securities are traded in the Over-The-Counter (OTC) market. This is a rich sample domain due to high relative frequency of auditor changes and high relative variance in ownership structure. Four hypotheses related to potential signaling and to managerial incentive and control issues are formulated and tested. In general, support is found for a conditional theory of differential market reaction to auditor change, depending on the level of management ownership in the switching client firm and on the direction of auditor change (to or from Big Eight auditors).
- Publication
Auditing: A Journal of Practice & Theory, 1989, Vol 9, Issue 1, p29
- ISSN
0278-0380
- Publication type
Academic Journal