Public Oversight and Reporting Credibility: Evidence from the PCAOB Audit Inspection Regime

• 成果类型: Article
• 署名作者: Gipper, Brandon; Leuz, Christian; Maffett, Mark
• 署名单位: Stanford University; University of Chicago; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz149
• 发表日期: 2020
• 页码: 4532
• 关键词: sarbanes-oxley act; information-content; earnings quality; MARKET RESPONSE; disclosure; SOX; IMPACT; determinants; decline; firm

摘要

This paper studies the impact of public audit oversight on financial reporting credibility. We analyze changes in market responses to earnings news after public audit oversight is introduced, exploiting that the regime onset depends on fiscal year-ends, auditors, and the rollout of auditor inspections. We find that investors respond more strongly to earnings news following public audit oversight. Corroborating these findings, we find an increase in volume responses to 10-K filings after the new regime. Our results show that public audit oversight can enhance reporting credibility and that this credibility is priced in capital markets.