TY - JOUR
T1 - Regulatory oversight and auditor market share
AU - Aobdia, Daniel
AU - Shroff, Nemit
N1 - Publisher Copyright:
© 2017 Elsevier B.V.
PY - 2017/4/1
Y1 - 2017/4/1
N2 - We examine whether auditor regulatory oversight affects the value of financial statement audits. Using the PCAOB international inspection program as a setting to generate within country variation in regulatory oversight, we find that non-U.S. auditors inspected by the PCAOB gain 4% to 6% market share from competing auditors after PCAOB inspection reports are made public. When inspection findings reveal that an auditor has many engagement-level deficiencies, market share gains following inspection reports are significantly smaller. Our evidence suggests that regulatory scrutiny increases the assurance value of an audit and highlights the role of public regulatory oversight in the audit market.
AB - We examine whether auditor regulatory oversight affects the value of financial statement audits. Using the PCAOB international inspection program as a setting to generate within country variation in regulatory oversight, we find that non-U.S. auditors inspected by the PCAOB gain 4% to 6% market share from competing auditors after PCAOB inspection reports are made public. When inspection findings reveal that an auditor has many engagement-level deficiencies, market share gains following inspection reports are significantly smaller. Our evidence suggests that regulatory scrutiny increases the assurance value of an audit and highlights the role of public regulatory oversight in the audit market.
UR - http://www.scopus.com/inward/record.url?scp=85017179954&partnerID=8YFLogxK
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U2 - 10.1016/j.jacceco.2017.03.001
DO - 10.1016/j.jacceco.2017.03.001
M3 - Article
AN - SCOPUS:85017179954
VL - 63
SP - 262
EP - 287
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
IS - 2-3
ER -