Work

The impact of PCAOB international registration on audit quality and audit fees: Evidence from China

Year: 2022

Type: article

Abstract: Despite the importance of registration with the PCAOB, there is surprisingly little academic research on the registration process and its impact on audit outcomes (Abernathy et al., 2013). The PCAOB allows registration of audit firms from non-US countries. However, China and a few other countries do not allow the PCAOB to conduct inspections of audit firms. We take advantage of this setting to investigate whether PCAOB-registered audit firms improve audit quality in the absence of inspections and whether they charge an audit fee premium. Our findings indicate that audit quality increases following PCAOB registration and that clients pay higher audit fees for audits by PCAOB-registered firms.

Source: Journal of Accounting and Public Policy

DOI: 10.1016/j.jaccpubpol.2022.106947

Authors: Partha S. Mohapatra, Hamilton Elkins, Gerald J. Lobo, Wuchun Chi

Institutions: California State University, Sacramento, University of Saskatchewan, University of Houston, National Chengchi University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,170

OpenAlex ID: W4283397397

FWCI: 6.346

Cites: 57

Cited by: 17

Related to: 10