Can a Viral Blunder Damage Auditor Brand Name Reputation? Evidence From Envelopegate
研究了2017年奥斯卡颁奖礼上普华永道的“信封门”事件，发现该病毒式负面事件导致其审计客户股价显著下跌，且影响集中在高声誉需求客户，表明审计品牌价值易受非审计相关负面事件冲击。
“Envelopegate” is a term used to describe PricewaterhouseCoopers’ (PwC)’s service failure that occurred during the 2017 Academy Awards ceremony (“the Oscars”). For PwC, the error resulted in immediate and unprecedented negative publicity, which was driven by a viral response on social media and other online media platforms. Thus, Envelopegate offers a unique opportunity to observe the potential spillover effects of negative viral events on the brand name reputation of an audit firm. Using intraday and daily client stock returns, we find a significant negative market response for PwC audit clients within the first minute of trading on the day following Envelopegate. The negative market effect is driven by clients with higher demand for auditor reputation, but we find no evidence that results are driven by any specific audit market region. Thus, our research underscores the susceptibility of an audit firm’s brand value to negative viral events, even when the event is unrelated to audit services. The findings of this study should be of interest to scholars exploring how audit firms form and maintain reputations as well as to professional service firms that engage in highly visible client services as part of their strategic efforts to enhance brand value.