Auditor reputation, auditor independence and local market prices: Contagious effect on Andersen's clients in Malaysia

• Main Authors: Shafie, Rohami, Md. Idris, Kamil, Wan Ahmad, Wan Norhayati
• Format: Conference or Workshop Item
• Language: English
• Published: 2005
• Subjects: HF5601 Accounting
• Online Access: http://repo.uum.edu.my/11801/1/Rohami%20Shafie.pdf; http://repo.uum.edu.my/11801/

This study examines the impact of Andersen reputation on market prices using the event that Andersen has admitted shredded documents related to the Enron audit in United States. Specifically, in this paper, we extend to the other stock exchange out of United States, namely Bursa Malaysia.Is there any contagious impact on Andersen reputation to the Bursa Malaysia? Since the admitted announcement shows the issue of independence as the main focus in the Andersen case, this study also document the impact of non-audit fees on market reaction surrounding the admitted announcements date.Interestingly, the results prevails a contagious impact on Andersen's Malaysia office.However, Andersen's Malaysia office only suffered a less severe decline compared to Andersen's United States and Houston office. In addition, there is no evidence that Andersen's Malaysia questionable.