Katsushi Suzuki

Abstract Prior studies have found that engagement partner busyness influences audit effectiveness. The more workload partners have from clients, the busier partners will be, resulting in lower audit quality. However, internal resources available to partners can attenuate the partners’ work burden, although the moderating effect of such resources has been mostly overlooked in the literature. As partners’ work burden could lessen for a partner with more internal resources, we elaborate on its effect in this study. We examine the following types of internal resources: (1) availability of higher‐ranked personnel and (2) accumulated client‐specific information. Our results show that engagement partners reduce audit quality for a client when partners bear higher work burden from other clients, for which limited internal resources are available. Moreover, the results indicate that this mutual impact on the audit quality of partners’ workload and internal resource availability for other clients is more pronounced for non‐Big 4 clients. These results suggest that internal resource allocation is critical for quality control, especially for non‐Big 4 audit firms.

Research Summary: Firm performance and corporate governance have been shown to influence CEO selection, but our understanding of the role of social capital is more limited. In this study, we seek to provide further insight into the role of social capital by examining the influence of both “bonding” and “bridging” forms of social capital on CEO appointments. We find that candidates who have relational social capital, in terms of overlap with the CEO in organizational tenure, board tenure, and CEO tenure are more likely to be appointed as CEO. We also find that candidates who have external linkages to the CEO in the form of geographic, prestigious university, and prior employment affiliations are more likely to be appointed CEO. Managerial Summary: The appointment of a new CEO has significant and widespread implications for the firm’s future strategic direction and performance, the relationship between the board and CEO, and perceptions by investors, employees, and other key stakeholders. Our study finds that candidates who have shared connections and experiences with the CEO in terms of geographic, prestigious university, or prior employment affiliations as well as overlap in terms of organizational tenure, board tenure, and CEO tenure are more likely to be appointed CEO. Given the enormous impact that executive appointments have on the strategic direction and performance of the company, it is important to recognize that social factors such as shared experiences and connections influence how candidates are perceived, and thus, may affect appointment decisions.

This paper examines the effects of characteristics of bank underwriters on issue costs in seasoned equity offerings in Japan following deregulation in 1999. I find that banks' holding loans have a negative effect on price discounts and no effect on underwriting fees. However, banks' equity holdings have no effect on discount rates and a positive effect on underwriting fees. Furthermore, issuers with unhealthy banks pay higher discount rates, are more likely to be weak in their ex-post operating performance, and are less willing to switch underwriters. I conclude that the characteristics of banks have different effects on issue costs. (C) 2009 Elsevier B.V. All rights reserved.

Purpose – The purpose of this paper is to empirically examine the relationship between the level of underwriter spread and ownership structure by using data from Japanese IPO firms that are issued during the years 1997-2002. Design/methodology/approach – The paper uses regression analysis to determine the effect of the ownership structure (board, bank, affiliated venture capital firms) on underwriter spread and on the post-issue operating performance of IPO firms. Findings – This paper finds several results that are in contrast with previous studies. The ownership by board members is positively associated with the level of gross spread but is not associated with post-issue operating performance. The presence of a commercial bank in the ownership structure of IPO firms decreases the gross spread and increases the post-issue operating performance of IPO firms. Issuers pay a lower underwriting fee as the ownership share of the lead underwriter-affiliated VC increases, unlike that of other VCs. Originality/value – The results of this paper, supporting certification and monitoring hypotheses, contribute to academic research. Most previous studies do not support certification effects. © 2008, Emerald Group Publishing Limited