2012
DOI: 10.2308/ciia-50269
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Should PCAOB Disciplinary Proceedings Be Made Public? Evidence from Sanctions against a Big 4 Auditor

Abstract: SUMMARY:In our paper ''Client Stock Market Reaction to PCAOB Sanctions against a Big 4 Auditor'' (Dee et al. 2011), we examine stock price effects for clients of a Big 4 audit firm when news of sanctions imposed by the PCAOB against the audit firm was made public. These PCAOB penalties were the first against a Big 4 auditor, and they revealed information about quality-control problems at the audit firm that were not publicly known until the sanctions were announced. Our analysis of stock prices suggests that i… Show more

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Cited by 7 publications
(3 citation statements)
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“…Another recent example is the current debate on proposed Congressional Legislation (U.S. House of Representatives [], H.R. 3503) about whether PCAOB inspection reports delineating quality‐control deficiencies of specific audit firms should be made public, or as per the current requirements of the Sarbanes–Oxley Act, the PCAOB should continue to release such deficiencies only at the industry level, and keep firm‐specific reports private (e.g., Dee, Lulseged, and Zhang [], Wainberg et al. []).…”
Section: Introductionmentioning
confidence: 99%
“…Another recent example is the current debate on proposed Congressional Legislation (U.S. House of Representatives [], H.R. 3503) about whether PCAOB inspection reports delineating quality‐control deficiencies of specific audit firms should be made public, or as per the current requirements of the Sarbanes–Oxley Act, the PCAOB should continue to release such deficiencies only at the industry level, and keep firm‐specific reports private (e.g., Dee, Lulseged, and Zhang [], Wainberg et al. []).…”
Section: Introductionmentioning
confidence: 99%
“…Second, inspection reports may omit critical quality control issues if audit firms satisfactorily resolve these concerns within 12 months of the date of the inspection report. Third, even though disciplinary orders of small audit firms disclose detailed descriptions of violations and sanctions, they have been relatively under‐investigated because previous studies have generally focused on disciplinary orders associated with big 4 audit firms instead (Boone, Khurana, & Raman, 2015; Dee, Lulseged, & Zhang, 2012).…”
Section: Literature Review and Research Questionsmentioning
confidence: 99%
“… While prior literature documents the reputation effects of PCAOB's sanctions for big auditors, including negative stock market reactions (Dee et al, 2012), decreasing audit fees and loss of clients ((Boone et al, 2015), the consequences of sanctions against small auditors are relatively under‐investigated. Due to the small survivorship of auditor firms after the revocation or censure, research on the consequences has been more concentrated on the clients involved (Branson & Futrell, 2017).…”
mentioning
confidence: 99%