Reportgreen2015

Public Audit Oversight and Reporting Credibility: Evidence from the PCAOB Inspection Regime

Brandon Gipper · Christian Leuz · Mark G. Maffett

54 citations0/0 files storedNational Bureau of Economic Research

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Auditing, Earnings Management, Governance Corporate Governance and Financial Management Financial Reporting and XBRL

Abstract

This paper studies the impact of public audit oversight on financial reporting credibility.We analyze changes in market responses to earnings news after public audit oversight is introduced, exploiting that the regime onset depends on fiscal year-ends, auditors, and the rollout of auditor inspections.We find that investors respond more strongly to earnings news following public audit oversight.Corroborating these findings, we find an increase in volume responses to 10-K filings after the new regime.Our results show that public audit oversight can enhance reporting credibility and that this credibility is priced in capital markets.

Citations in this library

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References

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Cited by

2019Accounting quality and the transmission of monetary policy 2018Is Silence Golden? Audit Team Leader Reactions to Subordinates Who Speak Up “In the Moment” and at Performance Appraisal 2020Audit Regulation and Cost of Equity Capital: Evidence from the PCAOB 's International Inspection Regime*2019Implicit Corporate Taxes and Income Shifting 2018Investment Dynamics and Earnings‐Return Properties: A Structural Approach 2015Real Effects of PCAOB International Inspections

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