دانلود رایگان مقاله انگلیسی خطر سقوط و رابطه ی حسابرس و مشتری - وایلی 2017

Abstract

This study examines whether the term of the auditor-client relationship (i.e., auditor tenure) is associated with future stock price crash risk measured both ex ante and ex post. Using a large sample of U.S. public firms with Big 4 auditors, we find robust evidence that auditor tenure is negatively related to one-year-ahead stock price crash risk. The evidence is consistent with monitoring-by-learning where development of client-specific knowledge over the term of the auditor-client relationship enhances auditors’ ability to detect and deter bad news hoarding activities by clients, thereby reducing future crash risk. This result holds even after controlling for endogeneity of the tenure/crash risk relation. We further provide evidence indicating that option market investors do not fully incorporate the information contained in the term of auditor-client relationship in predicting future stock price crash risk. Our empirical results have important policy implications for regulators concerned with ensuring auditor independence.

5. Conclusion

In this study, we investigate whether the term of the auditor-client relationship is associated with future stock price crash risk. Using a large sample of U.S. public firms with Big 4 auditors from the years 1981 to 2011, we find robust evidence that auditor tenure is negatively related to one-year-ahead stock price crash risk. Our empirical results are consistent with the monitoring-by-learning perspective that developing client-specific knowledge over the term of the auditor-client relationship enables auditors to detect and deter bad news hoarding activities by audit clients, thus reducing future stock price crash risk. Also, using data from the option market, we document that option market investors do not fully recognize the information contained in the term of audit-client relationship in predicting future stock price crash risk.

From a methodological perspective, by focusing on stock price crash risk, a comprehensive market-based outcome measure, our study provides more robust findings regarding the relation between auditor tenure and managerial manipulation of bad news in comparison to prior literature that centers on a specific manipulation channel such as accruals or classification shifting. Research that centers on one specific channel could easily lead to false inferences about this relation. Our paper in this regard responds to the call from the PCAOB for evidence on the role that auditors played in corporate financial disclosures during the recent financial crisis (PCAOB 2011c, 2012).