Business, Management and Accounting
7 years ago

Auditors' Risk Evaluation Impacts IPO Success and Audit Fees.

Australian Accounting Review
The Effect of IPO Risks on Auditors’ Decisions: Auditor Designation Case
Kwang Wuk Oh, Seok Woo Jeong, Seon Mi Kim, Seung Weon Yoo

Paper Summary

The study looked at how audit risks in the Korean IPO market affect auditors' decisions. They found that firms not eligible for IPO had lower discretionary accruals, meaning auditors saw them as less likely to go public. These firms also paid higher audit fees, showing auditors were concerned about future financial troubles post-IPO. This research helps us understand how auditors evaluate risks and make decisions in the IPO process.

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