Abstract
The Securities Act of 1933 governs the going public process and the accompanying registration statement submissions to the Securities and Exchange Commission (SEC). The Jumpstart Our Business Start-ups (JOBS) Act of 2012 created several accommodations under the SEC securities laws for a new group of referred to as emerging growth companies (EGCs). We examine whether auditor risk and effort, the initial public offering (IPO) offer prices, and investors' perceptions of the registrants' intrinsic value (underpricing) are related to EGCs' registration statements utilizing accommodations to reduce financial statement information disclosed. Our findings suggest that EGCs utilizing the accommodations to reduce financial statement disclosures are associated with increased auditor risk and effort, proxied by IPO accounting fees. We also find that filing as an EGC and utilizing reduced financial statement disclosure accommodations is negatively associated with IPO offer prices and underpricing.
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