Doogar Audit 2004 Revised MASTER

The Impairment of Auditor Credibility: Stock Market Evidence from the Enron-Andersen Saga * Rajib DoogarTheodore Sougiannis Hong Xie Department of Accountancy College of Business University of Illinois at Urbana-Champaign November, 2003 * Corresponding author. Address all correspondence to: 1206 S. Sixth Street, Champaign, IL 61820, U.S.A. e-mail: doogar@uiuc.edu, Phone: 217.244.8083, Fax: 217.244.0902. We thank Rashad Abdel-Khalik, Dennis Chambers, Uday Chandra, Jong-Hag Choi, Peter Easton, Brooke Elliott, Dave Hulse, Kathryn Kadous, Linda McDaniel, Clive Lennox, Siyi Li, Tom Omer, Bob Ramsay, Dave Ricchiute, Josh Ronen, Jim Seida, Ira Solomon, Tom Stober, Dave Ziebart and seminar participants at The University of Cincinnati, The University of Illinois at Chicago, The University of Illinois at Urbana-Champaign, The University of Kentucky, McMaster University, and The University of Notre Dame for helpful comments and suggestions. The Impairment of Auditor Credibility: Stock Market Evidence from the Enron-Andersen Saga Abstract: We investigate potential auditor credibility impairment effects resulting from Arthur Andersen LLP s (hereafter Andersen) January 10, 2002 shredding admission as well as from other emerging news about the role of Andersen in Enron s financial collapse. Overall, the evidence suggests that the shredding admission ...