Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
2018 James O Smith
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.
Smith, James, "Investor Reactions to the Enforcement Actions of the Public Company Accounting Oversight Board" (2018). CMC Senior Theses. 1855.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.