دانلود رایگان مقاله انگلیسی اثرات بازار حسابرسی با مجادله با کمبود GAAP، بازرسی گزارش PCAOB - الزویر 2018

ABSTRACT

As part of its charter, the Public Company Accounting Oversight Board (PCAOB) has the authority to inspect and review the workpapers of all accounting firms that provide auditing services to publicly traded companies. The PCAOB summarizes their findings in publicly available inspection reports available on its website. Prior research suggests that the accessibility, variation and source creditability of the inspection reports creates a publicly available audit quality signal that is used by various auditor choice stakeholders. This is particularly true for triennially inspected auditors that receive a GAAP-deficient report (Abbott, Gunny, & Zhang, 2013). In a GAAPdeficient inspection report, the PCAOB alleges that the auditor failed to identify departures from generally accepted accounting principles (GAAP) in the clients' financial statements. In this paper, we investigate whether and to what extent the auditor's response – which is also encapsulated in the inspection report – impacts the reaction to GAAP-deficient inspection reports. We create a sample of 113 GAAP-deficient inspection reports that correspond to 100 unique auditors. For these 100 auditors and their 805 audit clients, we find auditors that dispute the PCAOB findings are less likely to be dismissed by their clients when the client has an audit committee with accounting-related financial expertise. Collectively, our results indicate that auditor choice stakeholders weigh both the PCAOB- and auditor-assessments of auditor performance.

6. Conclusion

Prior literature (Abbott et al., 2013; Daugherty et al., 2011) suggests that clients perceive GAAP-deficient PCAOB inspection reports to be a signal of low audit quality and respond in the form of auditor dismissal. We investigate the effects of the auditor's response, which is also included in the PCAOB inspection report, on the auditor dismissal decision. We find that GAAP-deficient, triennially inspected auditors that dispute the PCAOB findings are far less likely to be dismissed when a client has an audit committee director with accounting-related financial expertise. Our results suggest that knowledgeable members of the audit committee read PCAOB inspection reports and consider both the PCAOB's and the auditor's perspectives when making decisions about auditor dismissal/retention.

Our study presents evidence suggesting that auditors' responses contain important information that is used by audit committees and other stakeholders to evaluate the auditor. Prior research focuses on information provided by the PCAOB (Abbott et al., 2013; Daugherty et al., 2011; Dee, Lulseged, & Zhang, 2011; Nagy, 2014). Our evidence indicates that the auditor's response is another important signal that relays the auditor's perspective on the PCAOB inspection process. Given the continually evolving nature of the auditing and inspection processes, we encourage future research on the economic, accounting and audit quality implications of the PCAOB inspection process.