Research On The Impact Of Accounting Firms Reputation On IPO Underpricing

The phenomeno of high IPO underpricing existed the world securities markets, especially in emerging markets. Chinese stock market experienced suspended for8times, and8times to restart. Every time, IPO restarted, the underpricing was the key content that could not be ignored. Nowadays, IPO restarted again, the high IPO underpricing became the focus of the marketThere were many factors which influence the IPO underpricing, the article was from the accounting repuration perspective, combined with the theory of asymmetric information, to study its effect on IPO underpricing. It is helpful to enrich the theoretical study of IPO market, and was great theoretical significance on strengthening accounting erputation mechanism from the system exploration. At the same time, the study also had practical signifcance on reducing the information asymmetry and IPO underpring and improving the effciency of the securities markets.This article mainly used the literature method, the theory reseach and empirical research methods and statistical analysis method. Firstly, it introduced the research background, purpose and significance, sorting out and summarizing the domestic and foreign research literature through three aspects below:accounting firm reputation, IPO underpricing and the impact of accounting firm reputation to IPO underpricing. Secondly, the author overviewed related concepts and theories of the accounting firm’s reputation and IPO underpricing, and summarized the development status quo of Certified Public Accountants in our country, the IPO underpricing level and the status of the impact of accounting firms reputation to IPO underpricing. Thirdly, this paper proposed and verified three hypothesises. Selecting2005-2012Shanghai and Shenzhen A-share IPO companies as research samples, used multiple linear regression model, tested empirically whether there was a negative relationship between the two. The result showed that:(1) the empirical results of CPA reputation and underpricing based on the A-share market as a whole showed that the accounting firm’s reputation were negatively related to IPO underpricing, hypothesis H1was verified, and through significant test, indicating that they were significant negative correlation, that is, high reputation of CPA significantly reduced underpricing.(2)Empirical results based on the listed companies in the main board and the medium-sized board of the impact of the accounting firm’s reputation on IPO underpricing, got the coefficient in front of the CPAs (Ar) was negative, and through the significant test, hypothesis H2was verified, too.(3) Empirical results based on the companies listed on GEM, got the coefficient in front of the CPAs (Ar) was negative, but it did not pass the test of significance, so hypothesis H3had not been fully verified. Empirical research conclusion:Accounting Reputation could reduce the IPO underpricing, they were negative correlation. Lastly, put forward some countermeasures and suggestions from two aspects of accounting firms, and national policies and regulations, hoping to be good at enhancing the reputation of the accounting firms and thus reducing IPO underpricing, and continuously improving the efficiency of China’s securities market.