| Summary: | 碩士 === 東吳大學 === 會計學系 === 85 === A high-quality audit lends credibility to clients'' earnings
report. According to basic intuition, investors'' response to an
earnings surprise will depend on the perceived credibility of
the earning report. In this study, we examine whether the
earnings response coefficient(ERC) differs between the firms
audited by high-quality auditors and those audited by low-
quality auditors. We use auditor size and reputation as the
proxy of audit quality, and we adapt two methods to class
auditors: Big Six(B6) and non-Big Six(NB6), Big Five(B5) and
non-Big Five(NB5). The study finds that the ERCs of B6 clients
are significantly higher than those of NB6 clients. The ERCs of
B5 clients are higher than those of NB5 clients, but the
difference is not statistically significant. In other words,
this paper roughly supports that there is a positive relation
between audit quality and ERC in Taiwan listed companies.
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