Doctor of Philosophy (PhD)
I examine the costs and benefits to the issuer of hiring an IPO auditor specialist in the U.S. Initial Public Offerings market. I quantify IPO auditor expertise at the market share level and the market concentration level and then I investigate the audit fees of IPO audit expertise and the issuer underpricing in the U.S. IPO market. I find that there are significant fee premiums when an audit firm is a national IPO audit specialist and when an audit office is a city IPO audit specialist. I also find that IPO specialist auditors reduce first-day issuer underpricing. These results are robust to controlling for extant endogeneity with respect to choice of auditor. This paper contributes to both the auditor specialization literature and the IPO literature by investigating IPO audit specialization. This study also provides useful information to IPO market participants, such as issuers, investors, auditors, and regulators.
Document Availability at the Time of Submission
Release the entire work immediately for access worldwide.
Park, Jung Eun, "The Pricing of IPO Audit Expertise and Subsequent Issuer Underpricing" (2017). LSU Doctoral Dissertations. 4256.