A Preliminary Analysis of PCAOB Inspection of Non-US Auditors

• In Event: Auditing 4

Abstract

As required by the Sarbanes-Oxley Act, auditors of public companies in U.S. must be registered with the PCAOB. This includes both U.S and non-U.S. audit firms who must then be subject to the inspection provisions of the Board’s rules. The inspections enable the PCAOB to ensure all U.S. laws and professional standards have been adhered to by the audit firms in the performance of their audit. However, as of December 31, 2012, the PCAOB has been unable to complete the inspections in 17 of the 43 non-U.S. jurisdictions. We examine the reports on the basis of the difference in the countries’ economic development status – developed vs. developing.

Authors

• Shifei Chung, Rowan University

• Ramesh Narasimhan, Montclair State University