The PCAOB’s Achievement of Its Mission
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The auditing field within the accounting industry had been self-regulated until the Sarbanes Oxley Act of 2002 (SOX) was passed in response to the cumulation of accounting scandals. SOX created the Public Company Accounting Oversight Board (PCAOB) to oversee the auditing field through inspections of completed audits. This study seeks to support two hypotheses: that the PCAOB is achieving its mission of protecting investors from improperly completed audits of public companies by decreasing the total number of insufficient audits and that there is causal relationship between auditing firms and causes of deficient audits as well as between the industry of a company being audited and causes of deficient audits. This archival study examined 247 Settled Disciplinary Orders, which are documents of improper audits published by the PCAOB. The results found that the number of Settled Disciplinary Orders has increased over time, that there was one firm with an unusual number of causes of improper audits, and that there are no relationships between auditing firms and the causes of improper audits or between the industry of companies audited and the causes of improper audits. These results support the hypothesis that the PCAOB is achieving its mission through increased detection of improper audits and that the causes of an improper audit are not determined by the auditing firm conducting an audit or by the industry of the company being audited.