Do Audit Efforts Reduce Stock Price Crash Risk? The Role of Corporate Governance
Do Audit Efforts Reduce Stock Price Crash Risk? The Role of Corporate Governance
이상혁(School of Social Science, Hansung University); 정남철(School of Business Administration, Hongik University)
53권 6호, 703~731쪽
초록
This study investigates the Korean audit market, revealing that increased audit efforts correlate with reduced stock price crash risk, suggesting audits bridge the information gap between managers and investors, deterring negative news hoarding. The study also finds that this relationship is stronger in firms with more external directors, institutional investor presence, and financial analyst oversight, highlighting the importance of robust corporate governance. The research implies that in emerging markets, comprehensive audits and strong governance are crucial to protect investors from the adverse effects of stock price crashes.
Abstract
This study investigates the Korean audit market, revealing that increased audit efforts correlate with reduced stock price crash risk, suggesting audits bridge the information gap between managers and investors, deterring negative news hoarding. The study also finds that this relationship is stronger in firms with more external directors, institutional investor presence, and financial analyst oversight, highlighting the importance of robust corporate governance. The research implies that in emerging markets, comprehensive audits and strong governance are crucial to protect investors from the adverse effects of stock price crashes.
- 발행기관:
- 한국증권학회
- 분류:
- 경영학