Audit Quality and Stock Price Synchronicity: Evidence from Emerging Stock Markets

• 발행기관: 한국유통과학회
• 저자명: Mohammad I. ALMAHARMEH Ali A. SHEHADEH Majd ISKANDRANI Mohammad H. SALEH
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.3, 833~843쪽, 전체 11쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.03.30

영문 초록

This research examines the impact of audit quality on the extent to which firm-specific information is integrated with a firm’s share price - which is determined inversely using stock price synchronicity. The study sample consists of non-financial companies listed on the Amman Stock Exchange i.e., the Jordanian Stock Market, from 2014–2018. After examining 810 firm-year observations from Jordanian industrial companies listed on the ASE, during the study period, we find that the companies using one of the BIG4 audit firms for auditing have less synchronous and more informative stock prices, suggesting high-quality audit improved governance and reduce information asymmetry between firms’ insiders and investors which enhances the capitalization of firm’s specific information into the stock price, thus less synchronous and more informative stock return. The findings remain consistent over 2 separate measurements of stock price synchronicity (Market and Industry model and Market Model) and show robustness for fixed effect tests. Our multivariate regression results are also robust after controlling for a number of features at the firm level with potential associations with stock price synchronicity. These include the firm size, leverage, return on assets (ROA), and market to book value (MBV).

목차

1. Introduction

2. Literature Review and Hypothesis Development

3. Measuring Variables and Model Specifications

4. Sample and Descriptive Statistics

5. Regression Results

6. Conclusions

References

키워드

Emerging Stock Markets Audit Quality Stock Price Synchronicity Stock Price Informativeness Information Asymmetry