Costs and Benefits of Audit Quality in the IPO Market: A Self-Selection Analysis
研究企业家在IPO中选择六大审计事务所时，权衡减少抑价收益与更高审计费用成本，发现市场存在差异化审计服务，企业主会选择最小化总成本的审计类型。
This study examines the tradeoffs that an entrepreneur makes in an initial public stock offering between the incremental costs and benefits of selecting a Big 6 audit firm. The benefit of hiring a Big 6 auditor is assumed to be reduced underpricing, consistent with Beatty (1989) and Balvers, et al. (1988). The cost of hiring a Big 6 auditor is higher auditor compensation. Evidence drawn from a sample of IPOs during the early 1990s is consistent with a differentiated market for audit services where owners select the type of auditor that minimizes the sum of underpricing and auditor compensation costs.