Deciphering the PCAOB Inspection Process: Evidence and Predictive Insights from Public Data

The authors thank Ranjani Krishnan (department editor), an anonymous associate editor, and two reviewers; Nicholas Hallman, Francine McKenna, Maureen McNichols, and Nemit Shroff; and seminar participants at the Baruch-SWUFE Research Symposium, Georgia State University, Michigan State University, the Ohio State University, Stanford PhD seminar, Stony Brook University, Temple University, the University of Connecticut, the University of Kentucky, the University of Minnesota, and the U.T. Austin Texas Audit Symposium for helpful comments on prior versions of this paper. The research assistance of Yamil Kaba is acknowledged. All data sets and background information in this study are available from publicly available sources described in the paper. D. Aobdia was a Senior Economic Research Fellow in the Center of Economic Analysis at the PCAOB between September 2014 and September 2016. He has been advising the PCAOB on questions related to the economics of auditing since March 2024. This paper was written outside of his affiliation with the PCAOB and primarily between 2019 and 2023. The views expressed in this paper are the views of the authors and do not necessarily reflect the views of the board, individual board members, or staff of the PCAOB.