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Does Audit Firm Hiring of Former PCAOB Personnel Improve Audit Quality?

(with Jagan Krishnan and Jayanthi Krishnan)

Review of Accounting Studies (2023)


We examine whether employees of the Public Company Accounting Oversight Board (PCAOB) that are hired by large audit firms are associated with subsequent higher audit quality at these firms. Employees at the PCAOB acquire expertise related to the industry they regulate, the audit industry. We predict that this expertise, which we label “regulatory audit quality expertise,” would improve audit quality at audit firms, particularly for clients with high misstatement risk. We find that regulatory audit quality expertise is associated with fewer client restatements, which are ex post indicators of high misstatement risk not properly addressed by the auditor (i.e., egregious audit quality issues). Further, along the continuum of audit quality, regulatory audit quality expertise is associated, for high risk clients, with audit quality improvements reflected in lower discretionary accruals and more accurate internal control audit opinions. Our results provide some evidence that regulatory audit quality expertise provided by former PCAOB employees is beneficial for audit quality.


2019  Temple University Workshop (Philadelphia, PA)

2020  AAA Audit Midyear Meeting (Houston, TX)

2020  AAA Doctoral Consortium (Virtual)

2020  AAA Annual Meeting (Virtual) - Click here for presentation materials

2020  Illinois Audit Symposium (Virtual)

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