Investment Management and Financial Innovations, vol.6, no.3, pp.212-229, 2009 (Refereed Journals of Other Institutions)
It is a priori belief that the auditing firm reputation provides information about the issuing firm’s true value in the initial public offering(IPO) markets. We analyze the auditing firm reputational role in the Istanbul Stock Exchange(ISE). We, in the course of doing so, basically compare the post-issue operating performance of high-reputable auditing firm-backed and low-reputable auditing firm-backed IPOs. We also investigate the relationship between the auditing firm reputation and the post-issue operating performance with regard to underpricing, the management ownership level, and investment banker reputation. We, int he last section of the study, explore whether the market recognizes the third party reputational role of the auditing firm in the ISE.