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The Deterrence Effect of Regulatory Sanctions: Evidence from Big 4 Auditor

Student thesis: Doctoral Thesis

Abstract

While extensive research highlights the positive impact of PCAOB inspections, the effectiveness and mechanisms of its enforcement actions remain underexplored and debated. This study investigates whether PCAOB enforcement actions improve audit quality, focusing on the differential impacts of partner-related and office-related sanctions. Results reveal that partner-related sanctions are expected to elicit stronger responses within sanctioned audit offices due to closer social proximity, while office-related sanctions drive broader improvements across non-sanctioned audit offices within the same audit firm by emphasizing systemic risks. The findings provide important insights into how varying types of sanctions generate deterrence effects.
Date of Award24 Jun 2025
Original languageEnglish
Awarding Institution
  • City University of Hong Kong
SupervisorJeong Bon KIM (Supervisor) & Bing LI (Supervisor)

Keywords

  • PCAOB enforcement
  • Audit quality
  • Regulation
  • Restatements
  • Sanctions

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