Graduation Year
2018
Date of Submission
4-2018
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics-Accounting
Reader 1
Andrew Finley
Terms of Use & License Information
Rights Information
2018 James O Smith
Abstract
I investigate whether investors have statistically significant negative reactions to the local clients of sanctioned auditors at the time of the PCAOB’s announcement of an enforcement action against that auditor. I also investigate whether or not the significance of the reactions has uniformly varied over time to account for the possibility of changing comprehensiveness in PCAOB enforcement actions. I measure abnormal returns using CAPM over three different measurement periods. I also disaggregate the data by year of enforcement action. 6 of the 27 data sets produced a statistically significant negative abnormal return suggesting that clients of sanctioned auditors do experience statistically significant abnormal negative returns at the time of the PCAOB’s announcement of the enforcement action. The significance of the abnormal returns did not vary overtime.
Recommended Citation
Smith, James, "Investor Reactions to the Enforcement Actions of the Public Company Accounting Oversight Board" (2018). CMC Senior Theses. 1855.
https://scholarship.claremont.edu/cmc_theses/1855
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
