| IPO Underpricing is the actual problem that have plagued the market regulators, Unbeaten myth of new shares makes a lot of money to hoard in the primary market. Resulting in resource allocation, the frequent change of Issue systems does not seem to solve the problem fundamentally. From issue systems, reputation of intermediary institu‐tions,scholars has been much research, but not been unanimous conclusion, that inspired more scholars into theoretical and empirical research on the IPO Underprice.In view of this, this article considers that, auditor as the information assurance re‐duces the information asymmetry to issuers and investors in the Issuance Market, passes the company quality of pros and cons of signals, will promote effect of IPO pricing, reduce the IPO Underpricing.From auditor reputation, IPO Underpricing and the relationship of auditor reputation and IPO Underpricing, we combed the domestic and foreign literature. we analyzed the emergence and role of Auditor Reputation Mechanism passed by Signal Theory, Theory of Supply and Demand, Selected the IPO company after the share‐trading reform as a re‐search sample, we chosen auditor ranking, audit costs and internal control reports to measure the Auditor Reputation, discussed the relationship between Auditor Reputation and Underpricing in the first day through comparative analysis, descriptive statistics and multiple regression method. Empirical results show that, there are significant negative correlation between auditor ranking, audit costs and internal control assurance report, but degree was low, while rectify measure did not significantly affect on IPO Underpricing. It declared that Auditor Reputation in lower underpricing has begun to highlight, Auditor Reputation has a certain amount of information content. At last, we came up with some suggestions about the establishment of Auditor Reputation, maximum play the role of auditor in the IPO process, improve the quality, protect investor’s interests. |
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