Common auditors and cross-country M&A transactions

Justin Chircop, Sofia Johan and Monika Tarsalewska

Journal of International Financial Markets, Institutions and Money, 2018, vol. 54, issue C, 43-58

Abstract: Using a comprehensive sample of cross-country mergers and acquisitions for the period 2000–2014 we examine the effect of common auditors on the efficiency of cross-country M&A transactions. We predict that the use of common auditors reduces uncertainty, resulting in higher M&A efficiency. We find that this common-auditor effect results in a positive market reaction to the M&A announcement, lower premium and greater increase in return on assets following the M&A transaction. Further, we find that these effects are more pronounced the greater the M&A transaction uncertainty and when the accounting standards of parties differ.

Keywords: Auditors; Information transfer; M&As (search for similar items in EconPapers)
JEL-codes: D82 D83 M41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:54:y:2018:i:c:p:43-58

DOI: 10.1016/j.intfin.2017.04.001

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