The informativeness of accounting earnings: acquirers' abnormal liquidity, the Big 4 auditor and auditors' industry specialisation effect
by Faten Hakim, Mohamed Ali Omri, Ines Hakim
International Journal of Technology, Policy and Management (IJTPM), Vol. 9, No. 4, 2009

Abstract: This paper examines the relationship between audit quality in Tunisia and the informativeness of earnings. In the literature, this relation can possibly be explained using the convergence of interests hypotheses. We examine the role of the Big 4 auditor and auditors' industry specialisation and how they are reflected in earnings informativeness. We use the acquirers' abnormal liquidity as a measure of earnings informativeness. Based on a sample of 42 firms over a period from 2003 to 2006, we find a positive association between auditor Big 4, auditors' industry specialisation and investor's perception of earnings quality. This result indicates that auditor Big 4 firms and specialisation are perceived to be of higher quality by investors.

Online publication date: Fri, 05-Mar-2010

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