Audit Effort and Stock Price Crash Risk

Han, Xiaomei1; Luo, Wei2; Wu, Liansheng3; Zhou, Wei4

2023-03-01

10.1111/abac.12281

ABACUS-A JOURNAL OF ACCOUNTING FINANCE AND BUSINESS STUDIES   影响因子和分区

0001-3072

1467-6281

We examine how stock price crash risk is affected by audit effort, as measured by audit hours. Using a unique dataset of audit hours in China, we find that audit effort is negatively related to crash risk. The negative impact of audit effort on crash risk is more pronounced for listed firms that have higher inherent risks and weaker external monitoring of their information environment. Our findings are robust to various tests, including a two-stage regression analysis, controlling for listed firm-fixed effects and audit firm-fixed effects, and using alternative measures of crash risk. In addition to audit output measures, audit effort has an incremental influence on crash risk. The effects of audit effort on crash risk continue to hold after controlling for auditor industry expertise and auditor tenure.

Audit effort Audit hours Crash risk

SSCI

英语

其他

National Natural Science Foundation of China["71932001","72072090","71773098"]

Business & Economics

Business, Finance

WOS:000929376500001

WILEY

Web of Science

1.Nanjing Univ Sci & Technol, Nanjing, Peoples R China
2.Peking Univ, Beijing, Peoples R China
3.Southern Univ Sci & Technol, Shenzhen, Peoples R China
4.Southwestern Univ Finance & Econ, Chengdu, Peoples R China

Han, Xiaomei,Luo, Wei,Wu, Liansheng,et al. Audit Effort and Stock Price Crash Risk[J]. ABACUS-A JOURNAL OF ACCOUNTING FINANCE AND BUSINESS STUDIES,2023,59(1).

Han, Xiaomei,Luo, Wei,Wu, Liansheng,&Zhou, Wei.(2023).Audit Effort and Stock Price Crash Risk.ABACUS-A JOURNAL OF ACCOUNTING FINANCE AND BUSINESS STUDIES,59(1).

Han, Xiaomei,et al."Audit Effort and Stock Price Crash Risk".ABACUS-A JOURNAL OF ACCOUNTING FINANCE AND BUSINESS STUDIES 59.1(2023).