We investigate whether gambling-motivated retail trading generates mispricing among firms with extreme negative news. Employing a novel accounting-based measure of failure propensity conveyed by the going-concern (GC) audit opinions, we show that gambling-induced trading in GC firms with...

If a company's auditor believes that the company is likely to enter bankruptcy, the auditor is required to warn investors by giving a 'equalified' audit report. This paper investigates whether managers use auditor switching to prevent auditors from giving qualified reports ('opinion-shopping')....