Does auditor change reduce information asymmetry? An examination of the effect on bid-ask spread using a big or non-big auditor classification

Faten Hakim Ghorbel and Mohamed Ali Omri

International Journal of Business Continuity and Risk Management, 2013, vol. 4, issue 2, 128-138

Abstract: This study addresses whether an auditor change affects information asymmetry as measured by bid-ask spread. We adopt a panel data methodology over the period 2000-2006. Consistent with the hypothesis that auditor change is important to the capital markets, we find that the auditor switches have associated with a positive market reaction. Furthermore, the result supports the assumption that the market supposes auditor change to big reduces information asymmetry. The results could be of assistance to Tunisian investor, since they can rely on a higher assurance audit quality after auditor change.

Keywords: auditor change; bid-ask spread; big auditors; Tunisian Stock Exchange; Tunisia; information asymmetry; quality assurance; audit quality; capital markets; market reaction. (search for similar items in EconPapers)
Date: 2013
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