AI Summary & Key Takeaways
AI InsightThe results are robust to various event windows and alternative audit firm reputation definitions.
📌 3 Key Takeaways
Abstract
This study investigates the market reaction surrounding the announcements of audit firm rotation by public firms quoted at BIST. In addition, it investigates how the market reaction to audit firm rotation changes based on the reputation of the previous and the new audit firms. After conducting an event study, we are unable to provide evidence suggesting that investors in Turkish capital markets value audit firm rotation. The market reaction surrounding the announcements of public firms to switch audit firms or to renew their contracts with the current audit firms is not statistically significant. Our findings also suggest that investors in Turkish capital markets do not value the reputation of audit firms when public firms switch auditors as well. The results are robust to various event windows and alternative audit firm reputation definitions.