Establishment of National Public Audit Oversight Boards and Audit Quality

61 Pages Posted: 10 Oct 2017 Last revised: 1 Jul 2021

See all articles by Elizabeth Carson

Elizabeth Carson

University of New South Wales

Phillip T. Lamoreaux

Arizona State University

Roger Simnett

UNSW Australia Business School, School of Accounting

Ulrike Thuerheimer

UNSW Business School

Ann Vanstraelen

Maastricht University

Date Written: June 30, 2021

Abstract

We examine the establishment of public audit oversight bodies (POB) around the world. While there is substantial evidence on the impacts of the U.S. PCAOB, generalizability of the PCAOB experience to other countries establishing POBs is not a foregone conclusion. We provide descriptive evidence on the establishment of POBs including characteristics of the POBs and factors associated with the timing of establishment up through 2020. Using a difference-in-differences research design over a 20-year period, we find that establishment of a POB is associated with improvements in audit quality. This association is driven by countries that committed to public oversight earlier in our time-series and only for those early POBs that mandate reporting of inspection results or have enforcement authority. This paper contributes to our understanding of public audit oversight and provides important nuance to the relation between POBs and audit quality.

Keywords: public audit oversight; audit quality; international; audit regulation

JEL Classification: M40, M42, M48, L51, L84, G18

Suggested Citation

Carson, Elizabeth and Lamoreaux, Phillip T. and Simnett, Roger and Thuerheimer, Ulrike and Vanstraelen, Ann, Establishment of National Public Audit Oversight Boards and Audit Quality (June 30, 2021). Available at SSRN: https://ssrn.com/abstract=3049828 or http://dx.doi.org/10.2139/ssrn.3049828

Elizabeth Carson

University of New South Wales ( email )

Sydney, NSW 2052
Australia
+612 9385 5822 (Phone)
+612 9385 5925 (Fax)

Phillip T. Lamoreaux

Arizona State University ( email )

Tempe, AZ 85287
United States

Roger Simnett

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052
Australia
+61 2 9385 5825 (Phone)
+61 2 9385 5925 (Fax)

Ulrike Thuerheimer

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Ann Vanstraelen (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

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