Regulatory oversight and auditor market share

• 成果类型: Article
• 署名作者: Aobdia, Daniel; Shroff, Nemit
• 署名单位: Northwestern University; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.03.001
• 发表日期: 2017
• 关键词: private enforcement; public enforcement; LITIGATION RISK; QUALITY; CONSEQUENCES; PROTECTION; big-4; COSTS

摘要

We examine whether auditor regulatory oversight affects the value of financial statement audits. Using the PCAOB international inspection program as a setting to generate within country variation in regulatory oversight, we find that non-U.S. auditors inspected by the PCAOB gain 4% to 6% market share from competing auditors after PCAOB inspection reports are made public. When inspection findings reveal that an auditor has many engagement-level deficiencies, market share gains following inspection reports are significantly smaller. Our evidence suggests that regulatory scrutiny increases the assurance value of an audit and highlights the role of public regulatory oversight in the audit market. (C) 2017 Elsevier B.V. All rights reserved.