Unintended Consequences: Essays on Competition for Capital and Financial Statement Assurance

Many thanks to Anik’s dissertation committee:

• Committee Chair: Tony Curatola – Professor, Joseph F. Ford Professor of Accounting – Drexel University
• Committee Member: Dan Dai – Assistant Professor – Drexel University
• Committee Member: Greg Nini – Associate Professor – Drexel University
• Committee Member: Curtis Hall – Associate Professor – Drexel University
• Committee Member: Hsihui Chang – Professor, KPMG Professor of Accounting – Drexel University

Abstract: The dissertation examines whether increased competition among capital seekers impacts demand and supply for financial statement assurance. Using data from start-ups’ campaign filings, I find evidence that demand for financial statement assurance among smaller start-ups decreases in response to increased competition, which has further downstream effects as it adversely impacts campaign outcomes. Furthermore, I find evidence that as increased competition reduces offering quality among smaller start-ups, this leads to decreased financial statement assurance services being provided by high-quality auditors. My findings contribute to the accounting literature by examining the links between competition among capital seekers and the demand and supply for financial statement assurance, which are yet to be explored. Furthermore, this study provides some supporting evidence that high-quality auditors may prefer less risky clients.