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Auditor Ratification, Stock Prices, And Auditor Change: A Comparative Study In Publicly Traded Companies

Author

Listed:
  • Daniel Acheampong
  • Isaac Osei Agyemang
  • Tanya S. Benford
  • Judy Wynekoop

Abstract

This study investigates the complicated relationships among auditor ratification, stock prices, and auditor change within publicly traded companies. We analyzed 44,398 observations spanning 2010 to 2023. We find that factors influencing auditor ratification include total shares outstanding, net income, audit benefits fees, and Russell 2000 index membership. Factors that affect stock prices include the total number of votes cast by shareholders, book value, and audit fees. This study also reveals that ratification year and audit benefits fees are related to auditor change. This study adds to the shareholder impact on corporate governance and stock price discussion.

Suggested Citation

  • Daniel Acheampong & Isaac Osei Agyemang & Tanya S. Benford & Judy Wynekoop, 2023. "Auditor Ratification, Stock Prices, And Auditor Change: A Comparative Study In Publicly Traded Companies," Accounting & Taxation, The Institute for Business and Finance Research, vol. 15(2), pages 93-104.
    • Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:93-104
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    References listed on IDEAS

    as
    1. Watts, Ross L & Zimmerman, Jerold L, 1983. "Agency Problems, Auditing, and the Theory of the Firm: Some Evidence," Journal of Law and Economics, University of Chicago Press, vol. 26(3), pages 613-633, October.
    2. Michael Firth & Kailong (Philip) Wang & Sonia ML Wong, 2015. "Corporate Transparency and the Impact of Investor Sentiment on Stock Prices," Management Science, INFORMS, vol. 61(7), pages 1630-1647, July.
    3. Faccini, Renato & Matin, Rastin & Skiadopoulos, George, 2023. "Dissecting climate risks: Are they reflected in stock prices?," Journal of Banking & Finance, Elsevier, vol. 155(C).
    4. DeFond, Mark & Zhang, Jieying, 2014. "A review of archival auditing research," Journal of Accounting and Economics, Elsevier, vol. 58(2), pages 275-326.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Auditor change; Auditor Ratification; Audit-related outcomes; Investor Confidence; Ratification Year; Russell 2000 Index; Shareholder Perceptions; Shareholder Voting;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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