On the Information Conveying in the Stock Market
博士 === 國立臺北大學 === 會計學系 === 95 === Basing on the Information Theory and the Agency Theory, this study provides further evidences into the capital market response to news about auditor disrepute, which undermines the credibility or precision of audited financial information. Further, I empirically exa...
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ndltd-TW-095NTPU03850012015-10-13T16:32:16Z http://ndltd.ncl.edu.tw/handle/34814043086300894273 On the Information Conveying in the Stock Market 證券市場資訊傳遞之研究 Chen, Li-Wei 陳立偉 博士 國立臺北大學 會計學系 95 Basing on the Information Theory and the Agency Theory, this study provides further evidences into the capital market response to news about auditor disrepute, which undermines the credibility or precision of audited financial information. Further, I empirically examine whether the market reactions are consistent with the prediction of the theory proposed in the part 1 (Chen and Yang, 2006). In a sample of 131 clients of auditors suffering reputation damage from 2000 to 2004, the preliminary test indicates that stock prices of the clients negatively react to the news about auditors’ disrepute. The evidence is consistent with the Information Theory and the Agency Theory that better auditor reputation generates better monitoring function and more precise financial report and results in higher stock prices. The further test is operationalized in a regression of cumulative abnormal returns, CARs, on the observational frequency of information to test for the difference between the CARs induced by different observational frequency. I find the extent that client firms react to news with higher frequency is significantly larger than that with lower frequency. Hence, the theory proposed in the part 1 (Chen and Yang, 2006) is evidenced. Also, results are consistent with the expectation that the client which is in worse financial condition and which has ever changed their auditor from unpunished one to the one suffering reputation damage experiences more negative abnormal returns on the news about the auditor disrepute. 楊清溪 學位論文 ; thesis 99 en_US |
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博士 === 國立臺北大學 === 會計學系 === 95 === Basing on the Information Theory and the Agency Theory, this study provides further evidences into the capital market response to news about auditor disrepute, which undermines the credibility or precision of audited financial information. Further, I empirically examine whether the market reactions are consistent with the prediction of the theory proposed in the part 1 (Chen and Yang, 2006).
In a sample of 131 clients of auditors suffering reputation damage from 2000 to 2004, the preliminary test indicates that stock prices of the clients negatively react to the news about auditors’ disrepute. The evidence is consistent with the Information Theory and the Agency Theory that better auditor reputation generates better monitoring function and more precise financial report and results in higher stock prices.
The further test is operationalized in a regression of cumulative abnormal returns, CARs, on the observational frequency of information to test for the difference between the CARs induced by different observational frequency. I find the extent that client firms react to news with higher frequency is significantly larger than that with lower frequency. Hence, the theory proposed in the part 1 (Chen and Yang, 2006) is evidenced. Also, results are consistent with the expectation that the client which is in worse financial condition and which has ever changed their auditor from unpunished one to the one suffering reputation damage experiences more negative abnormal returns on the news about the auditor disrepute.
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author2 |
楊清溪 |
author_facet |
楊清溪 Chen, Li-Wei 陳立偉 |
author |
Chen, Li-Wei 陳立偉 |
spellingShingle |
Chen, Li-Wei 陳立偉 On the Information Conveying in the Stock Market |
author_sort |
Chen, Li-Wei |
title |
On the Information Conveying in the Stock Market |
title_short |
On the Information Conveying in the Stock Market |
title_full |
On the Information Conveying in the Stock Market |
title_fullStr |
On the Information Conveying in the Stock Market |
title_full_unstemmed |
On the Information Conveying in the Stock Market |
title_sort |
on the information conveying in the stock market |
url |
http://ndltd.ncl.edu.tw/handle/34814043086300894273 |
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