Does Audit Regulation Improve the Underlying Information Used by Managers? Evidence from PCAOB Inspection Access and Management Forecast Accuracy

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dc.contributor.author Christensen, Brant
dc.contributor.author Lei, Lijun
dc.contributor.author Shu, Qing
dc.contributor.author Thomas, Wayne
dc.date.accessioned 2020-12-01T00:59:28Z
dc.date.available 2020-12-01T00:59:28Z
dc.date.issued 2020-08-15
dc.description.abstract Survey evidence and academic research raises the possibility that audit regulation can impact not only the information contained in external financial reports but also the internal information used by management (International Federation of Accountants, 2018; Libby, Rennekamp, & Seybert, 2015). We investigate this issue by examining the improvement in management forecast accuracy around initiation of the Public Company Accounting Oversight Board's (PCAOB) international inspection program. Consistent with managers having improved information, we find that managers issue more accurate forecasts following PCAOB inspection access. Further, this improvement in forecast accuracy is more pronounced in countries with stronger legal institutions, supporting the intended effect of legal institutions to facilitate enacted regulations. Our study uses a multi-country setting to provide evidence that audit regulation benefits an important internal stakeholder—managers.
dc.identifier.uri http://hdl.handle.net/10125/70532
dc.subject Pcaob International Inspection
dc.subject Voluntary Disclosure
dc.subject Management Forecast Accuracy
dc.subject Audit Regulation
dc.title Does Audit Regulation Improve the Underlying Information Used by Managers? Evidence from PCAOB Inspection Access and Management Forecast Accuracy
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