Is the PCAOB enforcement approach aligned with its mandate? Perspectives of sanctioned auditors and former PCAOB enforcement staff

• 成果类型: Article
• 署名作者: Cannon, Nathan; Lamoreaux, Phillip; Maksymov, Eldar; Myers, Noah
• 署名单位: Texas State University System; Texas State University San Marcos; Arizona State University; Arizona State University-Tempe; Utah System of Higher Education; Utah Valley University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.13019
• 发表日期: 2025
• 页码: 807-836
• 关键词: PROCEDURAL JUSTICE; performance; Inspection; FIRMS; Oversight

摘要

The Sarbanes-Oxley Act of 2002 mandates the PCAOB to enforce compliance with its audit standards fairly. However, the enforcement process is not sufficiently transparent for public evaluation of its fairness, prompting a call by a former Board member for transparency of the process and for improvement suggestions from the public. Further, academic evidence on the PCAOB enforcement is limited. We address this call and the gap in the literature by interviewing 33 difficult-to-access participants about the enforcement process: 20 sanctioned auditors and 13 former PCAOB enforcement staff members. Using procedural justice theory as a lens in evaluating our data, we conclude the enforcement process lacks fairness in key components. Both auditors and former enforcement staff express concerns that staff use overly damning one-sided language in public orders, do not assess investor harm, and face incentives to sanction auditors, particularly small firms that cannot afford costly defense. We contribute to the literature on PCAOB enforcement by offering new insights into the enforcement process from firsthand perspectives of sanctioned auditors and former enforcement staff, deepening understanding of how enforcement practices align with the PCAOB's mandate for fair procedures. We also discuss process improvement suggestions from our participants and important future research opportunities.