The Impact of NFRA on Analyst Earnings Forecast

Mathews T Abraham () and Nair Abhilash S ()
Additional contact information
Mathews T Abraham: Indian Institute of Management Kozhikode
Nair Abhilash S: Indian Institute of Management Kozhikode

No 433, Working papers from Indian Institute of Management Kozhikode

Abstract: This paper attempts to analyse the information content of a qualified audit opinion on the pricing of an IPO. To minimise the effect of selection bias, we match the sample of IPOs with an audit opinion and without, based on their propensity scores. Based on classical underpricing, firms with audit opinion were less underpriced as compared to others. As in prior literature, it is possible that the audit opinion helps investors assess and assume risk in a more informed manner. However, based on initial returns, these firms seem to be overpriced. This indicates that rather than signalling more information to the investor, the auditor’s report probably has little information owing to lack of effective and independent oversight by the auditor.

Keywords: Audit Qualification; Underpricing; IPO; Propensity Score Matching (search for similar items in EconPapers)
Pages: 3 pages
Date: 2021-03
New Economics Papers: this item is included in nep-acc
References: Add references at CitEc
Citations:

Downloads: (external link)
https://iimk.ac.in/websiteadmin/FacultyPublication ... pload_WP_03.pdf?t=45 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iik:wpaper:433

Access Statistics for this paper

More papers in Working papers from Indian Institute of Management Kozhikode IIMK Campus PO, Kunnamanagalam, Kozhikode, Kerala, India -673570. Contact information at EDIRC.
Bibliographic data for series maintained by Sudheesh Kumar ().