Journal of Accounting and Economics Vol. 15 No. 2-3 1992
The effects of qualified audit opinions on earnings response coefficients
Abstract
This study documents that the market's responsiveness to earnings announcements declines significantly after the issuance of qualified audit reports for a sample of ‘subject to’ qualifications and consistency qualifications. The results are consistent with a hypothesis that audit qualifications reduce the market's responsiveness to earnings announcements by altering the market's perception of earnings noise or the persistence of earnings, or both. Alternatively, a decline in earnings response coefficients may be observed because audit qualifications are more likely in firms that have undergone economic or structural changes and these changes, rather than the qualification per se, lead to decreased persistence or increased noise.
- DOI
- 10.1016/0165-4101(92)90019-x
- Volume
- 15
- Issue
- 2-3
- Pages
- 229-247
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref