Audit Quality and Stock Price Synchronicity: Evidence from Emerging Stock Markets |
ALMAHARMEH, Mohammad I.
(Accounting Department, Faculty of Business, The University of Jordan/Aqaba)
SHEHADEH, Ali A. (Faculty of Business, The University of Jordan/Aqaba) ISKANDRANI, Majd (Faculty of Business, The University of Jordan) SALEH, Mohammad H. (Faculty of Business, The University of Jordan/Aqaba) |
1 | Defond, M. L., & Zhang, J. (2014). The timeliness of the bond market reaction to bad earnings news. Contemporary Accounting Research, 31(3), 911-936. https://doi.org/10.1111/1911-3846.12050 DOI |
2 | Diamond, D. W. (1985). Optimal release of information by firms. The Journal of Finance, 40(4), 1071-1094. https://doi.org/10.1111/j.1540-6261.1985.tb02364. DOI |
3 | Dopuch, N., & Simunic, D. (1982). Competition in auditing and auditor reporting conservatism. Contemporary Accounting Research, 16(1), 135-165. https://doi.org/10.1111/j.1911-3846.1999.tb00577.x DOI |
4 | Durnev, A., Morck, R., Yeung, B., & Zarowin, P. (2003). Does greater firm-specific return variation mean more or less informed stock pricing? Journal of Accounting Research, 41(5), 797-836. https://doi.org/10.1046/j.1475-679X.2003.00124. DOI |
5 | Durnev, A., Morck, R., & Yeung, B. (2004). Value-enhancing capital budgeting and firm-specific stock return variation. The Journal of Finance, 59(1), 65-105. https://doi.org/10.1111/j.1540-6261.2004.00627 DOI |
6 | Fan, J. P., & Wong, T. J. (2005). Do external auditors perform a corporate governance role in emerging markets? Evidence from East Asia. Journal of Accounting Research, 43(1), 35-72. https://doi.org/10.1111/j.1475-679x.2004.00162. DOI |
7 | Boubaker, S., Mansali, H., & Rjiba, H. (2014). Large controlling shareholders and stock price synchronicity. Journal of Banking & Finance, 40, 80-96. https://doi.org/10.1016/j.jbankfin.2013.11.022 DOI |
8 | Chae, S. J., Nakano, M., & Fujitani, R. (2020). Financial reporting opacity, audit quality, and crash risk: evidence from Japan. The Journal of Asian Finance, Economics, and Business, 7(1), 9-17. http://doi.org/10.13106/jafeb.2020.vol7.no1.9 DOI |
9 | Chan, K., & Hameed, A. (2006). Stock price synchronicity and analyst coverage in emerging markets. Journal of Financial Economics, 80(1), 115-147. https://doi.org/10.1016/j.jfineco.2005.03.010 DOI |
10 | Chaney, P. K., Faccio, M., & Parsley, D. (2011). The quality of accounting information in politically connected firms. Journal of Accounting and Economics, 51(1-2), 58-76. https://doi.org/10.1016/j.jacceco.2010.07.003 DOI |
11 | Cheong, C. S., & Zurbruegg, R. (2016). Analyst forecasts and stock price informativeness: Some international evidence on the role of audit quality. Journal of Contemporary Accounting & Economics, 12(3), 257-273. https://doi.org/10.1016/j.jcae.2016.09.002 DOI |
12 | Chen, Q., Goldstein, I., & Jiang, W. (2007). Price informativeness and investment sensitivity to stock price. The Review of Financial Studies, 20(3), 619-650. http://dx.doi.org/10.1093/rfs/hhl024 DOI |
13 | Yordying, T. (2021). The impact of foreign ownership on stock price volatility: Evidence from Thailand. The Journal of Asian Finance, Economics, and Business, 8(1), 7-14. https://doi.org/10.13106/JAFEB.2021.VOL8.NO1.007. DOI |
14 | Morck, R., Yeung, B., & Yu, W. (2000). The information content of stock markets: Why do emerging markets have synchronous stock price movements? Journal of Financial Economics, 58(1-2), 215-260. https://doi.org/10.1016/S0304-405X(00)00071-4 DOI |
15 | Petersen, M .A. (2009). Estimating standard errors in finance panel data sets: Comparing approaches. The Review of Financial Studies, 22(1), 435-480. https://doi.org/10.1093/rfs/hhn053 DOI |
16 | Pham, C. B. T., VU, T. M. T., Nguyen, L. H., & Nguyen, D. D. (2020). audit quality and stock return co-movement: Evidence from Vietnam. The Journal of Asian Finance, Economics, and Business, 7(7), 139-147. DOI |
17 | Levitt, A. (1998). The importance of high-quality accounting standards. Accounting Horizons, 12(1), 79. |
18 | Houqe, M. N., Ahmed, K., & Van Zijl, T. (2017). Audit quality, earnings management, and cost of equity capital: Evidence from India. International Journal of Auditing, 21(2), 177-189. https://doi.org/10.1111/ijau.12087 DOI |
19 | Lin, J. W., & Hwang, M. I. (2010). Audit quality, corporate governance, and earnings management: A meta-analysis. International Journal of Auditing, 14(1), 57-77. https://doi.org/10.1111/j.1099-1123.2009.00403 DOI |
20 | Lin, K. J., Karim, K., & Carter, C. (2014). Stock price informativeness and idiosyncratic return volatility in emerging markets: Evidence from China. Review of Pacific Basin Financial Markets and Policies, 17(4), 1450025. https://doi.org/10.1142/S0219091514500258 DOI |
21 | Orazalin, N., & Akhmetzhanov, R. (2019). Earnings management, audit quality, and cost of debt: evidence from a Central Asian economy. Managerial Auditing Journal. https;//doi.org/10.1108/MAJ-12-2017-1730 DOI |
22 | Almarayeh, T. S., Aibar-Guzman, B., & Abdullatif, M. (2020). Does audit quality influence earnings management in emerging markets? Evidence from Jordan. Revista de Contabilidad-Spanish Accounting Review, 23(1), 64-74. https://doi.org/10.6018/rcsar.365091 DOI |
23 | Almutairi, A. R., Dunn, K. A., & Skantz, T. (2009). Auditor tenure, auditor specialization, and information asymmetry. Managerial Auditing Journal, 24(7), 600-623. https://doi.org/10.1108/02686900910975341 DOI |
24 | Alzoubi, E. S. S. (2016). Audit quality and earnings management: Evidence from Jordan. Journal of Applied Accounting Research, 17(2), 170-189. https://doi.org/10.1108/JAAR-09-2014-0089 DOI |
25 | Hutton, A., Marcus, A., & Tehranian, H. (2009). Opaque financial reports and the distribution of stock returns. Journal of Financial Economics, 94(1), 67-86. https://doi.org/10.1016/j.jfineco.2008.10.003 DOI |
26 | Ferguson, A., & Matolcsy, Z. (2004). Audit quality and post-earnings announcement drift. Asia-Pacific Journal of Accounting & Economics, 11(2), 121-137. https:/doi.org/10.1080/16081625.2004.10510639 DOI |
27 | Ruland, W., Shon, J., & Zhou, P., 2007. Effective controls for research in international accounting. Journal of Accounting and Public Policy, 26(1), 96-116. https://doi.org/10.1016/j.jaccpubpol.2006.11.004 DOI |
28 | Piotroski, J. D., & Roulstone, D. T. (2004). The influence of analysts, institutional investors, and insiders on the incorporation of market, industry, and firm-specific information into stock prices. The Accounting Review, 79(4), 1119-1151. https://doi.org/10.2139/ssrn.299931 DOI |
29 | Pittman, J. A., & Fortin, S. (2004). Auditor choice and the cost of debt capital for newly public firms. Journal of Accounting and Economics, 37(1), 113-136. https://doi.org/10.1016/j.jacceco.2003.06.005 DOI |
30 | Roll, R. (1988). R2 [J]. Journal of Finance, 43(3), 541-566. https://doi.org/10.1111/j.1540-6261.1988.tb04591 DOI |
31 | Teoh, S. H, & Wong, T. J. (1993). Perceived auditor quality and the earnings response coefficient. The Accounting Review, 68(2), 346-366. https://www.jstor.org/stable/248405?seq=1 |
32 | Van Tendeloo, B., & Vanstraelen, A. (2008). Earnings management and audit quality in Europe: Evidence from the private client segment market. European Accounting Review, 17(3), 447-469. https://doi.org/10.1080/09638180802016684 DOI |
33 | Vu, T. M. T., Truong, T. V., & Dinh, D. T. (2020). Determinants of liquidity in manufacturing firms. The Journal of Asian Finance, Economics, and Business, 7(12), 11-19. https://doi.org/10.13106/JAFEB.2020.VOL7.NO12.011 DOI |
34 | Wachid, F., &Yunita, D. N. (2019). The disclosure of financial and non-financial performance via narrative communication: Islamic Bank Annual Report. Sebelas Maret Business Review, 4(2), 77-92. https://doi.org/10.20961/smbr.v4i2.36042 DOI |
35 | Gujarati, D., N., & Porter, D. C. (2009). Basic Econometrics (5th ed.). New York: McGraw Hill. |
36 | Ferreira, M. A., & Laux, P. A. (2007). Corporate governance, idiosyncratic risk, and information flow. The Journal of Finance, 62(2), 951-989. https://doi.org/10.1111/j.1540-6261.2007.01228 DOI |
37 | Francis, J. R., Maydew, E. L., & Sparks, H. C. (1999). The role of Big 6 auditors in the credible reporting of accruals. Auditing: A Journal of Practice & Theory, 18(2), 17-34. https://doi.org/10.2308/aud.1999.18.2.17 DOI |
38 | Grossman, S. J., & Stiglitz, J. E. (1980). On the impossibility of informationally efficient markets. The American Economic Review, 70(3), 393-408. https://www.bu.edu/econ/files/2011/01/GSslides.pdf |
39 | Gul, F. A. (2006). Auditors' response to political connections and cronyism in Malaysia. Journal of Accounting Research, 44(5), 931-963. https://doi.org/10.1111/j.1475-679X.2006.00220 DOI |
40 | An, H., & Zhang, T. (2013). Stock price synchronicity, crash risk, and institutional investors. Journal of Corporate Finance, 21, 1-15. https://doi.org/10.1016/j.jcorpfin.2013.01.001 DOI |
41 | Ball, R., Jayaraman, S., & Shivakumar, L. (2012). Audited financial reporting and voluntary disclosure as complements: A test of the confirmation hypothesis. Journal of Accounting and Economics, 53(1-2), 136-166. https://doi.org/10.1016/j.jacceco.2011.11.005 DOI |
42 | Becker, C. L., DeFond, M. L., Jiambalvo, J., & Subramanyam, K. R. (1998). The effect of audit quality on earnings management. Contemporary Accounting Research, 15(1), 1-24. https://doi.org/10.1111/j.1911-3846.1998.tb00547 DOI |
43 | Ben-Nasr, H., & Alshwer, A. A. (2016). Does stock price informativeness affect labor investment efficiency? Journal of Corporate Finance, 38, 249-271. https://doi.org/10.1016/j.jcorpfin.2016.01.012 DOI |
44 | Ben-Nasr, H., & Cosset, J. C. (2014). State ownership, political institutions, and stock price informativeness: Evidence from privatization. Journal of Corporate Finance, 29, 179-199. https://doi.org/10.1016/j.jcorpfin.2014.10.004 DOI |
45 | Beuselinck, C., Deloof, M., & Vanstraelen, A. (2010). Earnings management contagion in multinational corporations (Working Paper). Tilburg University and Antwerp University. https://cris.maastrichtuniversity.nl/en/publications/earnings-managementwithin-multinational-corporations |
46 | Gul, F. A., Kim, J. B., & Qiu, A. A. (2010). Ownership concentration, foreign shareholding, audit quality, and stock price synchronicity: Evidence from China. Journal of Financial Economics, 95(3), 425-442. https://doi.org/10.1016/j.jfineco.2009.11.005 DOI |
47 | Gul, F. A., Srinidhi, B., & Ng, A. C. (2011). Does board gender diversity improve the informativeness of stock prices? Journal of Accounting and Economics, 51(3), 314-338. https://doi.org/10.1016/j.jacceco.2011.01.005 DOI |
48 | Healy, P. M., & Palepu, K. G. (1993). The effect of firms' financial disclosure strategies on stock prices. Accounting Horizons, 7(1), 1. https://www.hbs.edu/faculty/Pages/item.aspx?num=1917 |
49 | Choi, J. H., Kim, J. B., Liu, X., & Simunic, D. A. (2008). Audit pricing, legal liability regimes, and Big4 premiums: Theory and cross-country evidence. Contemporary Accounting Research, 25(1), 55-99. https://doi.org/10.1506/car.25.1.2 DOI |
50 | Wang, Q., Wong, T. J., & Xia, L. (2008). State ownership, the institutional environment, and auditor choice: Evidence from China. Journal of Accounting and Economics, 46(1), 112-134. https://doi.org/10.1016/j.jacceco.2008.04.001 DOI |
51 | Watts, R. L., & Zimmerman, J. L. (1983). Agency problems, auditing, and the theory of the firm: Some evidence. The Journal of Law and Economics, 26(3), 613-633. http://dx.doi.org/10.1086/467051 DOI |
52 | Wurgler, J., 2000. Financial markets and the allocation of capital. Journal of Financial Economics, 58(1-2), 187-214. https://doi.org/10.1016/S0304-405X(00)00070-2 DOI |
53 | Yeung, W. H., & Lento, C. (2018). Ownership structure, audit quality, board structure, and stock price crash risk: Evidence from China. Global Finance Journal, 37, 1-24. https://doi.org/10.1016/j.gfj.2018.04.002 DOI |
54 | Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X DOI |
55 | Jin, L., & Myers, S. C. (2006). R2 around the world: New theory and new tests. Journal of Financial Economics, 79(2), 257-292. https://doi.org/10.1016/j.jfineco.2004.11.003 DOI |
56 | Kim, J. B., Chung, R., & Firth, M. (2003). Auditor conservatism, asymmetric monitoring, and earnings management. Contemporary Accounting Research, 20(2), 323-359. https://doi.org/10.1506/J29K-MRUA-0APP-YJ6V DOI |
57 | Kim, J. B., & Shi, H. (2012). IFRS reporting, firm-specific information flows, and institutional environments: International evidence. Review of Accounting Studies, 17(3), 474-517. https://doi.org/10.1007/s11142-012-9190 DOI |
58 | DeFond, M. L. (1992). The association between changes in client firm agency costs and auditor switching. Auditing, 11(1), 16. https://search.proquest.com/openview/a5daf3654a77de1f1c1c5e79cf1af7a4/1?pq-origsite=gscholar&cbl=31718 |
59 | Krishnan, G. V. (2003). Does Big 6 auditor industry expertise constrain earnings management? Accounting Horizons, 17, 1-16. https://doi.org/10.2308/ACCH.2003.17.S-1.1 DOI |
60 | DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183-199. https://doi.org/10.1016/0165-4101(81)90002-1 DOI |