The Influence of Auditor’s Reputation and Underwriter’s Reputation to Underpricing Shares When Initial Public Offering

Abstract

—Underpricing is an initial public offering phenomenon that often occurs in the capital market. This study aims to obtain empirical evidence about the influence of auditor reputation and underwriter reputation on underpricing of shares. The population in this study are all companies that go public in Indonesia Stock Exchange in 2013-2017. The research method used is basic research with sample selection using purposive sampling method. The sample used in this research is 94 samples. The data of sample is using idx fact book and prospectus published on www.idx.co.id. This research uses multiple linear regression analysis and classical assumption test include descriptive statistic, normality test, multicollinearity test, autocorrelation test, and heteroscedasticity test. T test (partial test) were used to test the research hypothesis. The results of this research showed that the reputation of auditors and underwriter reputation proved to be significant on underpricing of share.