Title: The informativeness of accounting earnings: acquirers' abnormal liquidity, the Big 4 auditor and auditors' industry specialisation effect

Authors: Faten Hakim, Mohamed Ali Omri, Ines Hakim

Addresses: Faculte des Sciences Economiques et de Gestion de Tunis, Unite de recherche Fiscalite-Comptabilite-Controle-Audit (Fi2CA), Campus Universitaire, B.P. 248, El Manar II 2092, Tunis, Tunisia. ' Faculte des Sciences Economiques et de Gestion de Tunis, Unite de recherche Fiscalite-Comptabilite-Controle-Audit (Fi2CA), Campus Universitaire, B.P. 248, El Manar II 2092, Tunis, Tunisia. ' Faculte des Sciences Economiques et de Gestion de Sfax, Route de l'Aeroport Km 4 Sfax 3018, Tunisia

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.

Keywords: Big 4 auditor; auditor industry specialisation; cumulative abnormal liquidity; earnings informativeness; audit quality; Tunisia.

DOI: 10.1504/IJTPM.2009.032053

International Journal of Technology, Policy and Management, 2009 Vol.9 No.4, pp.387 - 398

Published online: 05 Mar 2010 *

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