| Summary: | 碩士 === 國立彰化師範大學 === 會計學系 === 102 === Once the prestigious auditor is accused of substandard audit work and exposures to legal liability, the public considers sanctioned auditor engaged in improper or unethical professional conduct and abundant of negligence and incompetence. In order to enhance the attractiveness of the securities offering, the client firm, which is willing to go public, regards the auditor selection decision as significant. Thus, one of objectives is to examine whether the auditors experience decreases in market share of initially public offerings audits following the enforcement activities issued from year 1998 to 2009. Furthermore, the study also controlled the differences in levels of sanction among auditors.
The sample included 2,289 auditor year observations; 25 for sanctioned auditors and 2,264 for control auditors. The results for regression analysis are showed as below:
1. Initially public offerings market share between sanctioned and non-sanctioned auditor are different significantly. It suggests auditors involved in disciplinary actions tend to lose market share in initially public offerings.
2. Once the criticized auditors involved in disciplinary actions, the increased sanction severity is significantly associated with declines in market share. There is no significant difference between non-sanctioned auditors and sanctioned auditors with lower level of penalties in changes of initially public offerings market share.
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