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When The Pcaob Talks, Who Listens? Evidence From Stakeholder Reaction To Gaap-Deficient Pcaob Inspection Reports Of Small Auditors, Lawrence J. Abbott, Katherine A. Gunny, Tracey Chunqi Zhang
When The Pcaob Talks, Who Listens? Evidence From Stakeholder Reaction To Gaap-Deficient Pcaob Inspection Reports Of Small Auditors, Lawrence J. Abbott, Katherine A. Gunny, Tracey Chunqi Zhang
Research Collection School Of Accountancy
Section 104 of the Sarbanes-Oxley Act (SOX) created the Public Company Accounting Oversight Board (PCAOB). The PCAOB conducts inspections of registered public accounting firms that provide audits for publicly traded companies. The results of the inspection process are summarized in publicly available reports at the PCAOB website. Using these reports, we categorize the inspection reports into three levels of increasing severity: clean, GAAS-deficient, and GAAP-deficient. We examine the potential use of GAAP-deficient PCAOB inspection reports as perceived audit quality signals for the clients of GAAP-deficient auditors that are inspected on a triennial basis by the PCAOB. Our investigation is predicated …