This paper investigates the relation between a firm's investment opportunity set (IOS) and the demand for audit quality. This paper hypothesizes that a firm's IOS influences the demand for audit quality indirectly through the IOS's influence on the firm's agency costs. A firm's IOS is expected to influence a firm's agency costs through the IOS's influence on the nature of the firm's contracts, and through the IOS'S influence on the relationships between the firm's management and the firm's owners and creditors. The sample is comprised of those firms who were being audited by Laventhol and Horwath (LH) when LH declared bankruptcy in November of 1990. The auditors appointed to replace LH ranged from members of the big six accounting firms to regional and local auditing firms. Because of the variation in the size of the replacement auditors, these auditor-replacement choices provide a good setting to study the factors associated with the demand for audit quality. The demand for audit quality is measured by the size of the replacement auditor. Two measures of this proxy are used. The first is a dichotomous variable representing the selection of a big six/non-big six auditor as the replacement auditor. The second is a continuous variable representing the subsequent auditor's size as measured by the combined sales of the replacement auditor's clients. Results obtained in this study are supportive of quality differentiated audits using both measures of auditor size. Firm-specific factors that are found to be significant in explaining a firm's demand for audit quality are: (1) management ownership, (2) debt, (3) the type of debt (public or private), and (4) risk. Control variables of firm size and the issuance of debt and equity securities are both positively associated with the size of the replacement auditor. The existence of a bonus plan and a direct measure of the firm's IOS are not significant in explaining the size of the replacement auditor. Tests of stock price reactions surrounding the bankruptcy of LH, and to the appointment of a successor auditor provide mixed results regarding the stock market's reaction to the effect of perceived audit quality on firm value.

University of Macau / Faculty of Science and Technology / Department of Mathematics

Dissertation (PhD)--University of Stellenbosch, 2008. / Bibliography. Available via the Internet.

Thesis (Honors)--College of William and Mary, 2009. / Includes bibliographical references (p. 82-83). Also available via the World Wide Web.

Thesis (Ph. D.)--Rutgers University, 2009. / "Graduate Program in Management." Includes bibliographical references (p. 130-137).

Thesis (Ph. D.)--University of Chicago, Graduate School of Business, August 2001. / Includes bibliographical references. Also available on the Internet.

This paper extends the real options literature by discussing an investment problem, where a firm has to determine optimal investment timing and optimal capacity choice at the same time under conditions of irreversible investment expenditures and uncertainty in future demand. After the project is installed with a certain maximum capacity, this capacity is fixed as an upper boundary to the output and cannot be adjusted later on. It turns out that, in the framework of this once and for all decision, uncertainty in future demand leads to an increase in optimal installed capacity. But on the other hand it causes investment to be delayed to an extent that even small uncertainty makes waiting and accumulation of further information the optimal decision for large ranges of demand. Limiting the capacity which may be installed weakens this extreme effect of uncertainty. (author's abstract) / Series: Report Series SFB "Adaptive Information Systems and Modelling in Economics and Management Science"

No description available.

This paper outlines the objective of the study on mean-variance optimization application in the Malaysian stock market. It offers a critical review of the salient literature that discuss the advantages and limitation of mean-variance analysis, especially in imperfect markets and thus sets the basis for trying out a novel portfolio management approach in Malaysia. / Mean-variance optimization was first developed by Harry Markowitz in 1952 but was later adopted by William Sharpe in his capital asset pricing model (CAPM) to exploit asset pricing anomalies to achieve exceptional gain and to diversify unsystematic risk in investment portfolios as compared to holding the market portfolio. / In this paper, the researcher explores the pros and cons of MV optimization through reviewing the past literature and suggests various modification/adaptation to the existing model to suit the local environment. He also suggests the addition of stock size and value as moderating factors to enhance the effectiveness of the test model. / Thesis (DBA(DoctorateofBusinessAdministration))--University of South Australia, 2006.

Thesis (doctoral)--Universitat, Erlangen-Nurnberg. / Title from e-book t.p. (viewed Jan. 17, 2008). Available through ebrary Inc. Includes bibliographical references.