The impact of audit quality in rights offerings

Balachandran, B., Faff, R., Nguyen, L.H.G. and Puwanenthiren, P. 2020. The impact of audit quality in rights offerings. Accounting & Finance. 60 (3), pp. 2007-2037. https://doi.org/10.1111/acfi.12429

TitleThe impact of audit quality in rights offerings
TypeJournal article
AuthorsBalachandran, B., Faff, R., Nguyen, L.H.G. and Puwanenthiren, P.
Abstract

Using audit quality as our core focus, we take a fresh look at the tradability and standby status in rights offerings, and the market reaction during the subscription period in the US market. We find that firms with high audit quality are more likely to choose tradable or full standby rights issues. We also find that the subscription period price reaction is positively related to audit quality and negatively related to issue price discount. These results demonstrate an important role played by the choice of auditors in the design of rights offerings, particularly in mitigating the negative price reaction during the subscription period.

JournalAccounting & Finance
Journal citation60 (3), pp. 2007-2037
ISSN0810-5391
Year2020
PublisherWiley
Digital Object Identifier (DOI)https://doi.org/10.1111/acfi.12429
Publication dates
Published online28 Dec 2018
Published in printSep 2020

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