The Efficacy of PCAOB Operational Decision Making

The operating budget of the Public Company Accounting Oversight Board (PCAOB) has grown significantly since the regulator’s inception, with the total annual resources consumed by the PCAOB almost doubling—from $127 million to $252 million—between 2006 and 2018 (PCAOB 2007, 2019). However, because all auditors of U.S. public companies have been subject to PCAOB oversight since the initiation of the regulator’s inspection program in 2003-2004, academic research has thus far offered little insight into whether the PCAOB’s budget growth and its related post-implementation operating decisions have improved the reliability of U.S. audits.

In a new study (available here), we attempt … Read more