The impact of mandatory versus voluntary auditor switches on stock liquidity in the Korean market

Choi, Sunhwa and Choi, Youn-Sik and Gul, Ferdinand and Lee, Woo-jong (2015) The impact of mandatory versus voluntary auditor switches on stock liquidity in the Korean market. British Accounting Review, 47 (1). pp. 100-116. ISSN 0890-8389

Full text not available from this repository.

Abstract

Using Korean listed firms subject to the auditor “designation rule”, this paper shows that (1) firms that switch auditors exhibit lower stock liquidity than firms that do not switch auditors, and (2) the negative liquidity effect of auditor switches is concentrated in firms that switch to low-quality auditors. Meanwhile, firms that switch auditors under the auditor designation system do not exhibit lower stock liquidity, consistent with audit designation mitigating the concerns about audit quality deterioration around auditor changes. Furthermore, we find that foreign ownership has a mitigating impact on the negative relation between auditor switches and stock liquidity, suggesting that investors are less concerned about auditor switches when an alternative monitoring mechanism exists.

Item Type:
Journal Article
Journal or Publication Title:
British Accounting Review
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1400/1402
Subjects:
ID Code:
71095
Deposited By:
Deposited On:
03 Oct 2014 15:25
Refereed?:
Yes
Published?:
Published
Last Modified:
13 May 2020 02:39