Do Auditor Change Announcements Trigger Information Acquisition?

ABSTRACT We study whether and under what circumstances individuals acquire company related information when the company files an auditor change announcement using two online sources: the SEC’s EDGAR system and Google searches. We find a significant increase in EDGAR download activity surrounding an auditor change announcement. We also find that EDGAR download activity is significantly greater for announcements involving disagreements. In addition, we find that EDGAR downloads are significantly greater when there is news coverage of an auditor change. We find no increase in information acquisition for change announcements using Google search and no evidence that the presence of news coverage moderates this relation. One implication of our study is that more sophisticated investors, who tend to use EDGAR, consistently respond to an auditor change announcement as if it is an important economic event, whereas less sophisticated investors, who tend to use Google, do not directly respond. Data Availability: The data used in this study are publicly available from the sources described in the text. JEL Classifications: D83; M42.