Materialization of new markets results in variations in company valuations due to information asymmetry compounded with uncertainty. This information asymmetry can lead to adverse selection and moral hazard. However, this information asymmetry can be reduced, to a certain extent, through...

Exploiting a legal regime change in China in 2005 that significantly increased auditors' legal liability, we reexamine why auditors are more likely to issue modified audit opinions (MAOs) to clients who receive negative press coverage before audit report dates. We find that the probability for...

This study investigates the relation between customer concentration and a supplier's cost of equity capital. We hypothesize that a more concentrated customer base increases a supplier's risk, which results in a higher cost of equity. Our results show a positive association between customer...