The impact of audit quality and managerial ability on financing decisions: US evidence
thesis
posted on 2023-01-18, 15:38 authored by Premkanth PuwanenthirenSubmission note: A thesis submitted in total fulfilment of the requirements for the degree of Doctor of Philosophy to the La Trobe Business School, College of Arts, Social Sciences and Commerce, La Trobe University, Bundoora.
This thesis consists of three essays on equity issuance in the US. The essay 1 examines the roles of audit quality in incorporating transferability and standby features in rights offerings. The essay 2 examines the determinants of SEO issuance choice decision and its impact on audit fee and long-term performance. The thesis also examines the role of Managerial ability on the issuance decisions of SEO in essay 3. The essay 1 examines the determinants of transferability and standby status in rights offerings, and the market reaction during subscription period. Using audit quality choice as our core focus, we take a fresh look at the transferability and standby status in rights offerings, and the market reaction during the subscription period in the US market. We find that audit quality plays a major role in influencing the design features of rights offerings. 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 the influential role played by the choice of auditor in the design of rights offerings, particularly in mitigating the negative price reaction during the subscription period. The essay 2 examines (a) the determinants of the issuance choice of SEO methods, (b) the impact of the issuance choice decision of SEO on post announcement period audit fee and (c) long term stock returns. We find that audit quality plays a major role in influencing the issuance choice decisions of SEO. We also find that high quality firms (larger and transparent firms with lower risk, higher liquidity and high-quality audit) choose accelerated offering. Firms making accelerated offerings pay lower audit fee and experienced strong announcement return. The essay 3 examines the impact of managerial ability on the issuance choice of SEO. We find that firms with more able managers select accelerated offerings. Overall, our study provides new insights into the impact of managerial ability on issuance choice decision.
This thesis consists of three essays on equity issuance in the US. The essay 1 examines the roles of audit quality in incorporating transferability and standby features in rights offerings. The essay 2 examines the determinants of SEO issuance choice decision and its impact on audit fee and long-term performance. The thesis also examines the role of Managerial ability on the issuance decisions of SEO in essay 3. The essay 1 examines the determinants of transferability and standby status in rights offerings, and the market reaction during subscription period. Using audit quality choice as our core focus, we take a fresh look at the transferability and standby status in rights offerings, and the market reaction during the subscription period in the US market. We find that audit quality plays a major role in influencing the design features of rights offerings. 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 the influential role played by the choice of auditor in the design of rights offerings, particularly in mitigating the negative price reaction during the subscription period. The essay 2 examines (a) the determinants of the issuance choice of SEO methods, (b) the impact of the issuance choice decision of SEO on post announcement period audit fee and (c) long term stock returns. We find that audit quality plays a major role in influencing the issuance choice decisions of SEO. We also find that high quality firms (larger and transparent firms with lower risk, higher liquidity and high-quality audit) choose accelerated offering. Firms making accelerated offerings pay lower audit fee and experienced strong announcement return. The essay 3 examines the impact of managerial ability on the issuance choice of SEO. We find that firms with more able managers select accelerated offerings. Overall, our study provides new insights into the impact of managerial ability on issuance choice decision.
History
Center or Department
College of Arts, Social Sciences and Commerce. La Trobe Business School.Thesis type
- Ph. D.
Awarding institution
La Trobe UniversityYear Awarded
2015Rights Statement
The thesis author retains all proprietary rights (such as copyright and patent rights) over the content of this thesis, and has granted La Trobe University permission to reproduce and communicate this version of the thesis. The author has declared that any third party copyright material contained within the thesis made available here is reproduced and communicated with permission. If you believe that any material has been made available without permission of the copyright owner please contact us with the details.Data source
arrow migration 2023-01-10 00:15. Ref: latrobe:41955 (9e0739)Usage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC