Publication Type

Working Paper

Version

publishedVersion

Publication Date

8-2019

Abstract

This study investigates whether the expanded audit report is informative to investors in the setting of an emerging economy. Using the recent staggered adoption of the expanded audit report for A+H and A share firms in China, we find robust evidence that abnormal trading volume and earnings response coefficients are higher, and stock price synchronicity are lower, in the post-adoption periods than in the pre-adoption periods. In additional tests, we find that the expanded audit report is more informative for non-State Owned Enterprises and for firms with higher information asymmetry. Overall, our study documents systematic evidence that the expanded audit report is incrementally informative to investors in an emerging economy.

Keywords

expanded audit report, market reaction, informativeness, earnings response coefficient, price synchronicity

Discipline

Accounting | Asian Studies

Research Areas

Corporate Reporting and Disclosure

First Page

1

Last Page

64

Publisher

SSRN

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