- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
Purpose–The purpose of this paper is to investigate the extent to which the transition from self-regulation to heteronomy has changed the gap in audit quality between Big Four and non-Big Four auditors. Design/methodology/approach–This study analyses publicly held companies in the United States between 1999 and 2012 using univariate analysis, multivariate analysis, and quantile regression analysis. Audit quality is measured with discretionary accruals. Findings–This study shows an insignificant difference in audit quality between the clients of Big Four and non-Big Four auditors after Public Company Accounting Oversight Board (hereafter, PCAOB) began its operations. In the analysis of the effects of PCAOB inspections on the audit quality of audit firms that are inspected annually and triennially, the findings show that the inspections have more positive effects when carried out annually. This suggests that that the frequency of inspection is positively associated with audit quality. Overall, these results provide evidence that recent improvements in audit quality have been caused by changes in regulatory standards Originality/value–The paper provides three major original contributions. First, we add to the literature on audit quality by further demonstrating a reduced gap in audit quality between Big Four and non-Big Four audit firms due to heteronomy. Secondly, this study contributes to the debate as to whether independent inspections on audit firms are beneficial or not, and suggests that the PCAOB inspections help increase audit quality. Finally, the results of this work contribute to the growing literature examining discretionary accruals.
5. Summary and conclusions
A considerable body of research has examined the relation between audit quality and auditor size, yet few works have examined this issue with respect to the switch from auditors’ self-regulation to heteronomy. In this study, we investigate the effect that the adoption of SOX had on the relation between audit quality and auditor size. Prior studies have found that big audit firms have better audit quality and are more likely to detect questionable accounting practices. We extend these studies and examine the following two issues. First, we examine whether SOX has improved the audit quality of both Big Four and non-Big Four auditors. Secondly, we examine whether SOX has reduced the gap in audit quality between Big Four and non-Big Four auditors. Specifically, we shed light on the effect of PCAOB inspections on audit firms’ audit quality. Two predictions are proposed in this work. The first is that clients of inspected firms report lower abnormal accruals following the full PCAOB inspections. The second is that SOX and PCAOB inspections reduce the difference in audit quality between Big Four and non-Big Four auditors.