Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Entire DC Network
The Effect Of Pcaob Inspections On Corporate Innovation: Evidence From Deficiencies About The Valuation Of Intangibles, Jungbae Kim
Research Collection School Of Accountancy
I examine the economic consequences on corporate innovation when PCAOB inspections cite auditors for insufficient procedures in auditing the valuation of intangibles. I find that the clients of deficient auditors recognize larger and timelier impairments of intangibles, suggesting that affected auditors increase scrutiny about the valuation of intangibles in subsequent audits. This effect obtains only for valuation-related deficiencies and is salient for the clients of auditors who receive such deficiencies repeatedly. I also document real effects that the clients of deficient auditors exhibit less use of external mergers and acquisitions—which yield recognizable intangibles whose valuation is subject to increased auditor …
The Association Between Earnings Quality And Regulatory Report Opinions In The Accounting Industry, Tracey Chunqi Zhang, Katherine Gunny
The Association Between Earnings Quality And Regulatory Report Opinions In The Accounting Industry, Tracey Chunqi Zhang, Katherine Gunny
Research Collection School Of Accountancy
We compare the outcome of two different information systems – self regulation versus private sector regulation – in the accounting industry. Under the Sarbanes-Oxley Act, Public Company Accounting Oversight Board (PCAOB) inspections replaced American Institute of Certified Public Accountants (AICPA) peer reviews of auditors. Peer review opinions are useful with respect to decisions about hiring and firing of auditors (Hilary and Lennox, 2005); therefore, the question remains what are the benefits of incurring the cost to replace a selfregulatory system with a private regulatory agency. We examine the usefulness of these two information systems at distinguishing earnings quality at firms …