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The Impact Of Audit Firm Industry Differentiation On Ipo Underpricing, Kun Wang, Michael Wilkins
The Impact Of Audit Firm Industry Differentiation On Ipo Underpricing, Kun Wang, Michael Wilkins
Michael S Wilkins
Purpose – The purpose of this paper is to investigate the relationship between auditor industry differentiation (specialization) and the underpricing of initial public offerings (IPOs). The intention is to determine whether IPO firms – particularly those in the small firm segment of the market where information asymmetry is likely to be greatest – can benefit from significantly better IPO pricing by engaging the services of differentiated auditors. Design/methodology/approach – The paper examines a broad sample of initial public offerings made between 1991 and 2000. It also conducts univariate and multivariate tests to assess the relationship between IPO underpricing and auditor …