Does Country Audit Quality Affect M&A Targeting Local Firms?

• In Event: Auditing

Abstract

This study examines the effect of a country's audit quality on the volume of mergers and acquisitions (M&A) targeting firms in the country. Findings indicate that greater audit quality leads to a higher volume of M&A. Further they indicate that improved accounting standards do not have an impact on M&A volume once audit quality is considered. Examining the tradeoff between improved audit quality and improved accounting standards indicates a substitution effect where higher audit quality only leads to more M&A volume when the country has not adopted IFRS.

Author

• Ryan T. Dunn, Auburn University