The Spillover of U.S. Regulatory Oversight to Foreign Markets: Evidence from the Effect of PCAOB International Inspections on Executive Compensations

IF 2.5 3区 管理学 Q2 BUSINESS, FINANCE
Chang He, Lixin (Nancy) Su, Zheng Wang, X. Zhu
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引用次数: 0

Abstract

We examine the spillover effect of the Public Company Accounting Oversight Board (PCAOB) international inspection program on improving the contracting role of accounting numbers in executive compensations in an international setting. For a sample of non-U.S.-listed foreign public firms with PCAOB-inspected foreign auditors, we find a significant increase in the sensitivity of their executive cash compensations to earnings after the release of the first inspection reports on their auditors by the PCAOB, relative to those without PCAOB-inspected foreign auditors. Such a result suggests that the compensation committees of firms with PCAOBinspected auditors infer that the quality of earnings as a performance measure for determining executive compensations improves due to the PCAOB’s inspections of their auditors. We also find that a clean inspection report issued to the firm’s auditor has an incremental effect on increasing earnings pay-for-performance sensitivity. Our findings provide novel evidence on the effectiveness of U.S. regulatory oversight in foreign markets and should interest the PCAOB and local audit regulators around the world.
美国监管对国外市场的溢出效应:来自PCAOB国际调查对高管薪酬影响的证据
我们研究了上市公司会计监督委员会(PCAOB)国际检查项目在国际环境下对改善会计数字在高管薪酬中的承包作用的溢出效应。对于非美国的样品。我们发现,与那些没有接受PCAOB检查的外国审计机构的上市公司相比,在PCAOB对其审计机构发布首次检查报告后,其高管现金薪酬对收益的敏感性显著增加。这样的结果表明,拥有PCAOB审计人员的公司的薪酬委员会推断,由于PCAOB对其审计人员的检查,作为决定高管薪酬的绩效指标的盈余质量得到了改善。我们还发现,向公司的审计师出具一份干净的检查报告,对提高业绩薪酬敏感性具有增量效应。我们的研究结果为美国在海外市场监管的有效性提供了新的证据,应该引起PCAOB和世界各地的地方审计监管机构的兴趣。
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来源期刊
European Accounting Review
European Accounting Review BUSINESS, FINANCE-
CiteScore
7.00
自引率
6.10%
发文量
58
期刊介绍: Devoted to the advancement of accounting knowledge, it provides a forum for the publication of high quality accounting research manuscripts. The journal acknowledges its European origins and the distinctive variety of the European accounting research community. Conscious of these origins, European Accounting Review emphasises openness and flexibility, not only regarding the substantive issues of accounting research, but also with respect to paradigms, methodologies and styles of conducting that research. Though European Accounting Review is a truly international journal, it also holds a unique position as it is the only accounting journal to provide a European forum for the reporting of accounting research.
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