Regulatory oversight and auditor market share

Daniel Aobdia, Nemit Shroff*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

68 Scopus citations


We examine whether auditor regulatory oversight affects the value of financial statement audits. Using the PCAOB international inspection program as a setting to generate within country variation in regulatory oversight, we find that non-U.S. auditors inspected by the PCAOB gain 4% to 6% market share from competing auditors after PCAOB inspection reports are made public. When inspection findings reveal that an auditor has many engagement-level deficiencies, market share gains following inspection reports are significantly smaller. Our evidence suggests that regulatory scrutiny increases the assurance value of an audit and highlights the role of public regulatory oversight in the audit market.

Original languageEnglish (US)
Pages (from-to)262-287
Number of pages26
JournalJournal of Accounting and Economics
Issue number2-3
StatePublished - Apr 1 2017


  • Assurance
  • Auditing
  • Financial reporting
  • Regulation

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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