The Role of Auditors in Merger and Acquisition Completion Time

15 Pages Posted: 23 Oct 2018

See all articles by Salim Chahine

Salim Chahine

American University of Beirut - Olayan School of Business; European Corporate Governance Institute (ECGI)

Iftekhar Hasan

Fordham University ; Bank of Finland; University of Sydney

Mohamad Mazboudi

American University of Beirut

Date Written: November 2018

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.

Keywords: Auditors, auditor experience, common auditors, completion time, mergers & acquisitions

Suggested Citation

Chahine, Salim and Hasan, Iftekhar and Mazboudi, Mohamad, The Role of Auditors in Merger and Acquisition Completion Time (November 2018). International Journal of Auditing, Vol. 22, Issue 3, pp. 568-582, 2018, Available at SSRN: https://ssrn.com/abstract=3271243 or http://dx.doi.org/10.1111/ijau.12142

Salim Chahine (Contact Author)

American University of Beirut - Olayan School of Business ( email )

Bliss Street
Beirut 1107 2020
Lebanon
961-1-374-374 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Iftekhar Hasan

Fordham University ( email )

45 COLUMBUS AVENUE
GBA-5TH FLOOR
NEW YORK, NY 10023
United States

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

University of Sydney ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

Mohamad Mazboudi

American University of Beirut ( email )

Olayan School of Business
PO Box 11-0236 Riad El Solh
Beirut
Lebanon
(961)1350000 (Phone)

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