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| Author: | Weber, J. Willenborg, M. |
| Title: | Do Expert Informational Intermediaries Add Value? Evidence from Auditors in Microcap Initial Public Offerings |
| Journal: | Journal of Accounting Research
2003 : SEP, VOL. 41: 4, p. 681-720 |
| Index terms: | INITIAL PUBLIC OFFERINGS STOCK RETURNS STOCK MARKETS STOCK MARKET LISTING |
| Language: | eng |
| Abstract: | In this article the authors study small, non-venture- backed initial public offering (IPOs), a segment of the market with the poorest long-run performance and where the prestigious audit firm is often the sole (if any) expert present. The authors find that the pre-IPO opinions of larger auditors are more predictive of post-IPO negative stock delistings. The findings also indicate that, for larger auditors the presence of a pre-IPO going-concern opinion is more strongly associated with first-year stock returns and that larger auditors are more likely to give such opinions to their distressed clients. Overall, the authors address a deficiency in the literature relating to "the paucity of evidence on the value of auditor opinions to investors". |
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