The Association Between Audit Quality and Post‐IPO Performance: A Survival Analysis Approach

Abstract

This study examines the issue of whether audit quality contracted by issuers at the time of going public is associated with post‐IPO survival. Survival analysis methodology is applied to estimate the probability of post‐IPO time to failure as a function of audit quality. Through estimation of the Cox‐Proportional Hazards models, we find that audit quality is significantly related to post‐IPO time to failure both in isolation and in the presence of other covariates that influence firm survival. Further, the association between audit quality and post‐IPO survival is stronger when investment bank prestige is low.

Citation

Jain, B.A. and Charles L. Martin Jr., C.L.M. (2005), "The Association Between Audit Quality and Post‐IPO Performance: A Survival Analysis Approach", Review of Accounting and Finance, Vol. 4 No. 4, pp. 50-75. https://doi.org/10.1108/eb043437