A MULTI-METHOD INVESTIGATION OF INDEPENDENT AUDIT REGULATORS: EVIDENCE AND IMPLICATIONS
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Authors
Luo, Yi
Date
Type
thesis
Language
eng
Keyword
Audit inspections , Regulatory focus , Regulatory capture , Audit regulators
Alternative Title
Abstract
This thesis uses multi-methods to examine the effectiveness and implications of independent audit regulators, such as the Canadian Public Accountability Board (CPAB) in Canada and the Public Company Accounting Oversight Board (PCAOB) in the United States, whose mandates include improving audit quality through periodic inspections of auditors’ work. In Study 1, I use experimental method to examine how regulators’ inspection feedback anchor interacts with audit firms’ national office style to impact audit partners’ commitment to the goal or reducing aggressive client income and the strategy audit partners intend to undertake to negotiate with their clients. I find that, conditional on having an antagonistic regulator – one that provides feedback anchored on failure – audit partners are less committed to their goal when they work with a collaborative national office than when they work with a prescriptive national office, and they are more inclined to seek win-win with the client. I also find that conditional on working with a collaborative national office, audit partners are more committed to their goals if the audit regulator’s feedback anchors on opportunities to improve rather than on failure. In Study 2, I use archival method to empirically examine CPAB’s inspection results for Canadian audit firms. Based on hand-collected data from CPAB’s and PCAOB’s inspection reports, I find that CPAB consistently reports a lower deficiency rate than PCAOB for the same large accounting firms under inspection (i.e., Canadian Big 4 accounting firms), and reports fewer areas of deficiency than PCAOB for the same large accounting firms inspected. Further analysis shows that CPAB also discloses much less information than PCAOB, consistent with what one would expect from a regulator being captured by the interest of large regulatees. Together, these studies extend existing accounting literature on audit regulations and have practical implications for audit regulators and audit firms.
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Queen's University's Thesis/Dissertation Non-Exclusive License for Deposit to QSpace and Library and Archives Canada
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Copying and Preserving Your Thesis
This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.
Attribution-NonCommercial-NoDerivs 3.0 United States
ProQuest PhD and Master's Theses International Dissemination Agreement
Intellectual Property Guidelines at Queen's University
Copying and Preserving Your Thesis
This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.
Attribution-NonCommercial-NoDerivs 3.0 United States