Did the PCAOB's Restrictions on Auditors' Tax Services Improve Audit Quality?

• 成果类型: Article
• 署名作者: Lennox, Clive S.
• 署名单位: University of Southern California
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51356
• 发表日期: 2016
• 页码: 1493-1512
• 关键词: earnings management; accounting restatements; nonaudit fees; CONSEQUENCES; INDEPENDENCE; Aggressiveness; avoidance; SOX

摘要

In 2005-2006, the PCAOB imposed restrictions on auditors' tax services in order to strengthen auditor independence and improve audit quality. The restrictions resulted in a significant drop in auditor-provided tax services (APTS). To test the impact on audit quality, I partition the sample into a treatment group (companies whose APTS purchases dropped significantly when the restrictions were introduced) and a control group (companies whose APTS purchases were relatively unaffected) and I measure audit quality using the incidence of accounting misstatements, tax-related misstatements, and auditors' going-concern opinions. Using a difference-in-differences design, I find no change in audit quality for the treatment group relative to the control group after the restrictions are imposed.