The role of auditors in merger and acquisition completion time

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Title: The role of auditors in merger and acquisition completion time
Author: Chahine, Salim ; Hasan, Iftekhar ; Mazboudi, Mohamad
Series: International Journal of Auditing
Series volume: 22
Series number: 3
Year of publication: 2018
Publication date: 15.11.2018
Page range: 568-582
Publisher: Wiley
Subject (yso): tilintarkastajat; yritykset; yrityskaupat; läpimenoaika
Keywords: M&A; fuusiot
Other keywords: auditors; auditor experience; common auditors; completion time; mergers & acquisitions
Abstract: Using a sample of 664 merger and acquisition (M&A) transactions and office‐level audit data, this study investigates the role of auditors in M&A completion time. We find that having a common auditor for both acquirer and target firms in M&A transactions increases the completion time of such transactions because the exposure to higher litigation and reputational costs outweighs the information‐access advantage of common auditors. However, auditors' past experience in M&A transactions helps reduce completion time and costs. These results are robust to having Big N auditors at both ends as well as to various acquirer, target, and deal characteristics.

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