Does audit firm hiring of former PCAOB personnel improve audit quality?

Acito, A.A., C.E. Hogan, and R.D. Mergenthaler. 2018. The effects of PCAOB inspections on auditor-client relationships. The Accounting Review 93 (2): 1–35.

Amiram, D., Z. Bozanic, and E. Rouen. 2015. Financial statement errors: Evidence from the distributional properties of financial statements numbers. Review of Accounting Studies 20 (4): 1540–1593.

Aobdia, D. 2018. The Impact of the PCAOB individual engagement inspection process – preliminary evidence. The Accounting Review 93 (4): 53–80.

Aobdia, D. 2019. Do practitioner assessments agree with academic proxies for audit quality? Evidence from PCAOB and internal inspections. Journal of Accounting and Economics 67 (1): 144–174.

Aobdia, D. 2020. The economic consequences of audit firms’ quality control system deficiencies. Management Science 66 (7): 2883–2905.

Aobdia, D., S. Siddiqui, and A. Vinelli. 2021. Heterogeneity in expertise in a credence goods setting: Evidence from audit partners. Review of Accounting Studies 26 (2): 693–729.

Aobdia, D., and R. Petachi. 2022. The effect of audit firm internal inspections on auditor effort and financial reporting quality. The Accounting Review, forthcominghttps://doi.org/10.2308/TAR-2020-0134

Baber, W.R., J. Krishnan, and Y. Zhang. 2014. Investor perceptions of the earnings quality consequences of hiring an affiliated auditor. Review of Accounting Studies 19 (1): 69–102.

Bhaskar, L.S., J.H. Schroeder, and M.L. Shepardson. 2019. Integration of internal control and financial statement audits: Are two audits better than one? The Accounting Review 94 (2): 53–81.

Center for Audit Quality. 2012. Guide to PCAOB Inspections (October). https://www.thecaq.org/wp-content/uploads/2019/03/guidetopcaobinspections.pdf. Accessed 5 Jun 2021.

Che, Y.K. 1995. Revolving doors and the optimal tolerance for agency collection. Rand Journal of Economics 26 (3): 378–397.

Christensen, B.E., N.G. Lundstrom, and N.J. Newton. 2021. Does the disclosure of PCAOB inspection findings increase audit firms’ litigation exposure? The Accounting Review 96 (3): 191–219.

Cohn, M. 2015. PCAOB Sees Decline in ICFR Audit Deficiencies. Accounting Today (August 11). https://www.accountingtoday.com/news/pcaob-sees-decline-in-internal-control-audit-deficiencies.

Cohn, M. 2019. Ernst & Young Sets Up an Independent Audit Quality Committee. Accounting Today (January 23). https://www.accountingtoday.com/news/ernst-young-sets-up-an-independent-audit-quality-committee.

Corporate Crime Reporter. 2018. Lynn Turner Wants to Break up the Big Four (February 15). https://www.corporatecrimereporter.com/news/200/lynn-turner-wants-break-big-four/.

Cunningham, L.M., C. Li, S.E. Stein, and N.S. Wright. 2019. What’s in a Name? Initial evidence of U.S. audit partner identification using difference-in-differences analyses. The Accounting Review 94 (5): 139–163.

Dechow, P.M., R.G. Sloan, and A.P. Sweeney. 1995. Detecting earnings management. The Accounting Review 70 (2): 193–225.

Dechow, P., W. Ge, and C. Schrand. 2010. Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics 50 (2–3): 344–401.

Dechow, P.M., W. Ge, C.R. Larson, and R.G. Sloan. 2011. Predicting material accounting misstatements. Contemporary Accounting Research 28 (1): 17–82.

DeFond, M.L., and C. Lennox. 2017. Do PCAOB inspections improve the quality of ICFR audits? Journal of Accounting Research 55 (3): 591–627.

DeFond, M.L., and J. Zhang. 2014. A review of archival auditing research. Journal of Accounting and Economics 58 (2–3): 275–326.

deHaan, E., S. Kedia, K. Koh, and S. Rajgopal. 2015. The Revolving door and the SEC’s enforcement outcomes: Initial evidence from civil litigation. Journal of Accounting and Economics 60 (2–3): 65–96.

Ege, M., W.R. Knechel, P.T. Lamoreaux, and E. Maksymov. 2020. A multi-method analysis of the PCAOB’s relationship with the audit profession. Accounting, Organizations and Society 84 (July):101131.

EY. 2017. Our Commitment to Audit Quality. https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/purpose/purpose-pdfs/ey-audit-quality-report-2017.pdf.

Fang, V., A. Huang, and J. Karpoff. 2016. Short selling and earnings management: A controlled experiment. Journal of Finance 71 (3): 1251–1294.

Francis, J.R., and M.D. Yu. 2009. Big 4 office size and audit quality. The Accounting Review 84 (5): 1521–1552.

Francis, J., D. Philbrick, and K. Schipper. 1994. Shareholder litigation and corporate disclosures. Journal of Accounting Research 32 (2): 137–164.

Francis, J.R., K. Reichelt, and D. Wang. 2005. The pricing of national and city-specific reputations for industry expertise in the U.S. audit market. The Accounting Review 80 (1): 113–136.

Francis, J.R., P.N. Michas, and S.E. Seavey. 2013. Does audit market concentration harm the quality of audited earnings? Evidence from audit markets in 42 countries. Contemporary Accounting Research 30 (1): 325–355.

Fung, S.Y.K., K.K. Raman, and X. Zhu. 2017. Does the PCAOB international inspection program improve audit quality for non-US-listed foreign clients? Journal of Accounting and Economics 64 (1): 15–36.

Ge, W., A. Koester, and S. McVay. 2017. Benefits and costs of Sarbanes-Oxley section 404(b) exemption: Evidence from small firms’ internal control disclosures. Journal of Accounting and Economics 63 (2–3): 358–384.

Geiger, M.A., C.S. Lennox, and D.S. North. 2008. The hiring of accounting and finance officers from audit firms: How did the market react? Review of Accounting Studies 13 (1): 55–86.

Gipper, B., C. Leuz, and M.G. Maffett. 2020. Public audit oversight and reporting credibility: Evidence from the PCAOB inspection regime. The Review of Financial Studies 33 (10): 4532–4579.

Grant Thornton. 2020. Audit Quality and Transparency Report. https://www.grantthornton.com/content/dam/grantthornton/website/assets/content-page-files/audit/pdfs/2020/audit-quality-transparency-report/audit-quality-transparency-report.pdf.

Hanlon, M., and N. Shroff. 2022. Insights into auditor public oversight boards: Whether, how, and why they “Work.” Journal of Accounting and Economics 74 (1): 101497.

Hendricks, B.E., W.R. Landsman, and F.D. Peña-Romera. 2022. The revolving door between large audit firms and the PCAOB: Implications for future inspection reports and audit quality. The Accounting Review 97 (1): 261–292.

Heninger, W.G. 2001. The association between auditor litigation and abnormal accruals. The Accounting Review 76 (1): 111–126.

Hoitash, R., and U. Hoitash. 2018. Measuring accounting reporting complexity with XBRL. The Accounting Review 93 (1): 259–287.

Hribar, P., and N.T. Jenkins. 2004. The effect of accounting restatements on earnings revisions and the estimated cost of capital. Review of Accounting Studies 9 (2–3): 337–356.

Hribar, P., T. Kravet, and R. Wilson. 2014. A new measure of accounting quality. Review of Accounting Studies 19 (1): 506–538.

Jabotinsky, H.Y. 2021. Revolving doors—we got it backwards. University of Cincinnati Law Review 89 (2): 432–454.

Jiang, J.X., I.Y. Wang, and K.P. Wang. 2018. Revolving rating analysts and ratings of mortgage-backed and asset-backed securities: Evidence from LinkedIn. Management Science 64 (12): 5641–5959.

Johnson, L.M., M.B. Keune, and J. Winchel. 2019. U.S. auditors’ perceptions of the PCAOB inspection process: A behavioral examination. Contemporary Accounting Research 36 (3): 1540–1574.

Kothari, S.P., A.J. Leone, and C.E. Wasley. 2005. Performance matched discretionary accrual measures. Journal of Accounting and Economics 39 (1): 163–197.

KPMG. 2015. Our Investment in Audit Quality. https://assets.kpmg.com/content/dam/kpmg/pdf/2016/04/our-investment-in-audit-quality.pdf.

Krishnan, J., J. Krishnan, and H. Song. 2017. PCAOB international inspections and audit quality. The Accounting Review 92 (5): 143–166.

Lamoreaux, P. 2016. Does PCAOB inspection access improve audit quality? An examination of foreign firms listed in the United States. Journal of Accounting and Economics 61 (2–3): 313–337.

MaloneBailey. 2011. MaloneBailey Announces Former PCAOB Inspections Specialist Joins the Firm. http://www.malonebailey.com/About-Us/News-and-Events/Press-Releases/MaloneBailey-Announces-Former-PCAOB-Inspections-Specialist-Joins-the-Firm/.

McGuire, S., T. Omer, and N. Sharp. 2012. The impact of religion on financial reporting irregularities. The Accounting Review 87 (2): 645–673.

Moon, J.R., Jr., J.E. Shipman, Q.T. Swanquist, and R.L. Whited. 2022. On controlling for misstatement risk. Auditing: A Journal of Practice & Theory 41 (2): 191–210.

Naiker, V., D.S. Sharma, and V.D. Sharma. 2013. Do audit firm partners on audit committees procure greater nonaudit services from the auditor? The Accounting Review 88 (1): 297–326.

Newquist, C. 2015. Learn All About Being a PCAOB Inspector from the Director Inspections. Going Concern (October 21). https://goingconcern.com/learn-all-about-being-pcaob-inspector-director-inspections/.

Newton, N.J., D. Wang, and M.S. Wilkins. 2013. Does a lack of choice lead to lower audit quality? Evidence from auditor competition and client restatements. Auditing A Journal of Practice & Theory 32 (3): 31–67.

O’Brien, R. D., D. Michaels, and M. Rapoport. 2018. Former KPMG Executives Charged with Conspiracy. The Wall Street Journal (January 22). https://www.wsj.com/articles/former-kpmg-executives-charged-with-conspiracy-1516640050.

Palmrose, Z.V. 2013. PCAOB audit regulations a decade after SOX: Where it stands and what the future holds. Accounting Horizons 27 (4): 775–798.

Public Company Accounting Oversight Board (PCAOB). 2013. Considerations for Audits of Internal Control Over Financial Reporting, Staff Practice Alert No. 11. https://pcaobus.org/Standards/QandA/10-24-2013_SAPA_11.pdf.

PCAOB. 2015. Inspection Observations Related to PCAOB “Risk Assessment” Auditing Standards (No. 8 through No.15). https://pcaobus.org/Inspections/Documents/Risk-Assessment-Standards-Inspections.pdf.

PCAOB. 2019. Staff Preview of 2018 Inspection Observations. https://pcaobus.org/Inspections/Documents/Staff-Preview-2018-Inspection-Observations.pdf.

PCAOB. 2020. Seeing Through the Regulatory Looking Glass: PCAOB Inspection Reports. https://pcaobus.org/news-events/speeches/speech-detail/seeing-through-the-regulatory-looking-glass-pcaob-inspection-reports_724.

SEC. 2019. Accounting and Auditing Enforcement. Release No. 34-86118. Washington, DC: SEC.

Shive, S.A., and M.M. Forster. 2017. The revolving door for financial regulators. Review of Finance 21 (4): 1445–1484.

Tan, C.E.L., and S.M. Young. 2015. An analysis of “Little r” restatements. Accounting Horizons 29 (3): 667–693.

Westermann, K.D., J. Cohen, and G. Trompeter. 2019. PCAOB inspections: Public accounting firms on “Trial.” Contemporary Accounting Research 36 (2): 694–731.

Zheng, W. 2015. The revolving door. Notre Dame Law Review 90 (3): 1265–1308.