| As an independent third-party institutions,accounting firms play a very important role.Firstly,they need to supervise companies in case of manipulating surplus by the managers.Then,they should discover the omission and misstatement in the financial statements and inform the management for modification immediately to improve the quality of the company’s accounting information.In addition,Accounting firms need to enhance the reliability of the accounting information and therefore improve the degree of trust by the prospective users of financial statements.So what about the impact of audit quality on the IPO process,where information asymmetry is more severe and investors rely more on independent third-party institutions,is a question worth studying.Moreover,speculation is a very common phenomenon in China’s stock market.Under the influence of speculative psychology,people generally show a strong preference for events with low probability but great profit.This kind of speculation by investors will significantly affect the pricing and earnings of assets.And this kind of speculation stems from the natural characteristics of human beings,and on the other hand,the information asymmetry and value uncertainty.Therefore,it’s also worthwhile to find whether high-quality auditing further impact IPO underpricing and long-term performance by discouraging speculation.Based on the A-Share IPO companies from 2006 to 2012,this paper uses the abnormal audit fee as a measure of the audit quality to discuss the correlation between the audit quality and IPO pricing,as well as the mechanism and degree of investors’ speculation as an intermediary variable in the role of audit quality on IPO pricing.The results show that high audit quality can reduce the degree of information asymmetry and reduce the IPO underpricing level,which means in China’s securities market,pre-IPO audit plays more of an information role than a signal role.At the same time,high audit quality can guarantee the quality of financial statements,reduce the speculation of investors,and then reduce the level of IPO underpricing and improve the long-term performances of listed stocks.And this intermediary effect is stronger at the level of institutional investors.Thirdly,audit quality is related to the long-term market performance after stock listing.Also,high-quality audit canimprove the long-term market performance after stock listing by inhibiting investors’ speculative behaviors.The intermediary effect is also stronger at the level of institutional investors.Finally,when distinguishing the lottery stocks and non-lottery stocks,the results show that high-quality audit has a greater impact on IPO underpricing and long-term market performance for lottery stocks.The research results have influence on market regulation,IPO pricing and investor behavior regulation. |
