Regulatory oversight and auditor market share
Name
Shroff_Regulatory oversight.pdf
Description
Accepted version
Size
634.53 KB
Format
Adobe PDF
Checksum (MD5)
7ad517f6e883f18abee867b32a80e646
Author(s)
Aobdia, Daniel
Shroff, Nemit
Date Issued
April 2017
Journal
Journal of Accounting and Economics
Publisher
Elsevier BV
Citation
Aobdia, Daniel and Nemit Shroff. "Regulatory oversight and auditor market share." Journal of Accounting and Economics 63, 2-3 (April 2017): 262-287 © 2017 Elsevier B.V.
Version
Author's final manuscript
Abstract
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.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Sloan School of Management
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1016/j.jacceco.2017.03.001
