The underpricing of initial public offerings (IPOs) is generally explained with asymmetric information and risk. We complement these traditional explanations with a new theory where investors worry also about the after-market illiquidity that may result from asymmetric information after the IPO. The less liquid the aftermarket is expected to be, and the less predictable its liquidity, the larger will be the IPO underpricing. Our model blends such liquidity concerns with signaling theory. The model's predictions are supported by evidence for 36 IPOs from Tehran Stock Exchange between 2006 and 2012. Using Hui & Heubel ratio of liquidity, we find that after-market liquidity is an important determinant of IPO pricing. Practical implementation-the finding of the study could be helpful for university students and users of financial information and other financial analysts in capital market.

The aim of this paper is to investigate the value relevance of the audit report, auditor type and auditor tenure in the Iranian context. This study evaluates the effects of various independent variables on the value relevance using a multiple regression analysis approach for 156 companies listed on the Tehran Stock Exchange (TSE) over a 10 year period. The results indicate that audit report has not the value relevance. Hence, unqualified audit report and other audit report are not different in capital market. Empirical results showed that the auditor type has a positive impact on the value relevance. This result is consistent prior studies. Thus, the value relevance of firms audited by government audit has more than firms audited by private audit. Also, when the tenure of auditors is long, it has a negative impact on the value relevance. This result is consistent prior studies. The empirical evidence indicates that audit ISSN 1946-052X 2013 www.macrothink.org/ajfa 90 report is not valued by the capital market in Iran and that audit privatization impact on the value relevance in capital market. Hence, the market regulators proposed that the more monitoring considered on audit quality to improve the value relevance in capital market. The results presented in the paper have important implications for both the auditing profession and regulators in Iran. Asian Journal of Finance & Accounting

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