{"title":"Do Audit Efforts Reduce Stock Price Crash Risk? The Role of Corporate Governance","authors":"Sang Hyuk Lee, Nam Chul Jung","doi":"10.1111/ajfs.12494","DOIUrl":null,"url":null,"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.","PeriodicalId":8570,"journal":{"name":"Asia-Pacific Journal of Financial Studies","volume":null,"pages":null},"PeriodicalIF":1.8000,"publicationDate":"2024-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asia-Pacific Journal of Financial Studies","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1111/ajfs.12494","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
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.
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