Auditor Tenure and the Value-relevance of Financial Statement

• Main Authors: Chen, Ching-Yi, 陳靜宜
• Other Authors: Fan, Hung-Shu
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/15758737171506590191

碩士 === 輔仁大學 === 會計學系碩士班 === 100 === This study is aimed at exploring the effect of auditor tenure on the value relevance of financial statement. This study refers that long auditor tenure would reduce earnings quality and, thus, affect the value-relevance of earnings and equity book value. The firms, listed on TSE or OTC during 1984~2010 are selected as sample firms. The final sample of this study consists of 17,091 firm-year observations. Moreover, Following Chi, Huang, Liao, and Xie’ (2009) concept, this study uses auditor tenure to conduct the empirical test. The empirical model of this study is Ohlson (1995) model. The empirical results show that the earnings’ value relevance of listed firms with long auditor tenure is lower than that of the counterparts of listed firms with long auditor tenure, and the equity book value’s value relevance of listed firms with long auditor tenure is higher than that of the counterparts of listed firms with short auditor tenure. This result means that long auditor tenure would reduce earnings quality, and thus make investors rely more (less) heavily on equity book value (earnings) in setting stock prices. Furthermore, this study conducts several additional tests and gets empirical results consistent with previous results.