Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9553315 | Journal of Accounting and Economics | 2005 | 19 Pages |
Abstract
Following the Sarbanes-Oxley Act, self-regulated peer reviews at accounting firms were replaced by independent inspections conducted by the Public Company Accounting and Oversight Board. Critics of self-regulation had argued that the peer review program lacked credibility. This paper tests whether the opinions issued by the peer reviewers provided credible information to clients about audit firm quality. We find audit firms gained clients after receiving clean opinions from their reviewers and lost clients after receiving modified or adverse opinions. This suggests peer review opinions provided credible information about quality differences between audit firms.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Gilles Hilary, Clive Lennox,