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
Citation
GOH, Beng Wee; LEE, Jimmy; LI, Dan; and WANG, Muzhi.
Informativeness of the expanded audit report: Evidence from China. (2019). 1-64.
Available at: https://ink.library.smu.edu.sg/soa_research/1853
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.