The Role of Shared and Same Signing Auditors in Enhancing Audit Quality for M&A Transactions

This study aims to investigate the impact of shared auditors and same signing auditors on audit quality in M&A transactions. Existing research suggests that shared auditors in M&A transactions are considered to enhance information symmetry, thereby improving transaction quality. However, there is a lack of systematic research on how shared auditors influence audit quality in M&A, particularly regarding the interaction with same signing auditors. Using a sample of 1,083 M&A transactions from the Chinese market between 2004 and 2020, we analyze the impact of shared auditors and the same signing auditors on audit quality during the M&A process. The findings indicate that both shared auditors and same signing auditors contribute to improved audit quality in M&A. Further analysis reveals that this enhancement effect is more pronounced in M&A across industries and provinces. Moreover, the impact on audit quality is stronger when the bidder is larger, non-state-owned, or not audited by the Big 4 audit firms. This study provides empirical evidence on the roles of auditors at both the firm and individual levels in improving audit quality, highlighting the potential value of shared auditors. The conclusions offer recommendations for enhancing audit quality and make informed choices regarding auditors. Jel Classification : M42.