turn induces a greater level of underpricing when the firm lists in the secondary market. While this enhanced risk premium may not be fully reflected in a firms stock price on the first day of trading, it is reasonable to assume that a proportion of the cost of the premium is borne by the entrepreneur(in the form of underpricing )who, in effect, "leaves money on the table' in order to allow the underwriter to sell the issue Investigation of audit qualification using Australian IPO firms offers a different perspective to the US market setting since IPO auditors in Australia can not formally qualify their attestations as investigating accountants. This is an important regulatory dimension and the extant literature has not explored how the accounting profession reconciles this apparent constrainton signaling power with the onus imposed by professional guidelines. In the australian regulatory environment it is necessary to consider a broader measure of audit qualification designed to incorporate circumstances where investigating accountants, or management, can formally approve an entity's accounts while implicitly questioning the ability of that firm to operate as a going- concern. In the Australian setting there is an"investigating accountants report "contained in the prospectus. Further, the accounting firms can influence management in the preparation of the prospectus to adequately disclose risks of concern to the accounting firm thereby mitigating the need for comment by the accountant or auditor we refer to this broader measure as the issuance of a going-concern warning. An opinion of this nature can be contained in a number of locations within the company's prospectus including: the ' Risk Factors' section prepared by company directors; or the report issued by the Investigating Accountant Our hypothesis extends research on the information content of pre-IPO audit qualifications to the australian context where recent amendments to the asX Listing rules have enhanced the average risk profile of a firm raising public equity through an IPO. Consistent with Rock's(1986) model of underpricing and the results documented by Willenborg and McKeown(2000)in a US setting, we hypothesise that the inclusion of a going concern warning by management or the investigating accountant will reduce the extent of underpricing. H3: The extent of underpricing for Australian technology IPOs is negatively associated with the inclusion in the prospectus of a going-concern'warning by either the management or the independent accounting firm retained by the IPO candidate11 turn induces a greater level of underpricing when the firm lists in the secondary market. While this enhanced risk premium may not be fully reflected in a firm’s stock price on the first day of trading, it is reasonable to assume that a proportion of the cost of the premium is borne by the entrepreneur (in the form of underpricing) who, in effect, ‘leaves money on the table’ in order to allow the underwriter to sell the issue. Investigation of audit qualification using Australian IPO firms offers a different perspective to the US market setting since IPO auditors in Australia can not formally ‘qualify’ their attestations as investigating accountants. This is an important regulatory dimension and the extant literature has not explored how the accounting profession reconciles this apparent ‘constraint’ on signaling power with the onus imposed by professional guidelines. In the Australian regulatory environment it is necessary to consider a broader measure of audit qualification designed to incorporate circumstances where investigating accountants, or management, can formally approve an entity’s accounts while implicitly questioning the ability of that firm to operate as a going￾concern. In the Australian setting there is an “investigating accountant’s report” contained in the prospectus. Further, the accounting firms can influence management in the preparation of the prospectus to adequately disclose risks of concern to the accounting firm thereby mitigating the need for comment by the accountant or auditor. We refer to this broader measure as the issuance of a going-concern warning. An opinion of this nature can be contained in a number of locations within the company’s prospectus including: the ‘Risk Factors’ section prepared by company directors; or the report issued by the Investigating Accountant. Our hypothesis extends research on the information content of pre-IPO audit qualifications to the Australian context where recent amendments to the ASX Listing Rules have enhanced the average risk profile of a firm raising public equity through an IPO. Consistent with Rock’s (1986) model of underpricing and the results documented by Willenborg and McKeown (2000) in a US setting, we hypothesise that the inclusion of a going concern warning by management or the investigating accountant will reduce the extent of underpricing. H3: The extent of underpricing for Australian technology IPOs is negatively associated with the inclusion in the prospectus of a ‘going-concern’ warning by either the management or the independent accounting firm retained by the IPO candidate