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An Analysis of PCAOB Enforcement When Auditors Violate Fraud-Related Audit Standards

Erik S. Boyle et al.

Journal of Forensic Accounting Research2025https://doi.org/10.2308/jfar-2024-014article
AJG 2ABDC B
Weight
0.37

Abstract

Recent reports highlight growing regulator dissatisfaction with external auditors’ role in fraud detection, which has contributed to the persistence of a gap in expectations between auditors, regulators, and investors. In this paper, we consider how the Public Company Accounting Oversight Board (PCAOB) uses its enforcement authority to sanction auditors for failing to adequately consider fraud during a financial statement audit. We collect and hand-code settled disciplinary orders, with a specific emphasis on violations of fraud-related audit standards. Our findings indicate that the PCAOB imposes more severe penalties and a higher number of penalties on individual auditors, but not firms, for violations of fraud-related audit standards compared with other standards. Our findings contribute to the literature by demonstrating how enforcement may be used to address gaps in expectations between regulators and practitioners. Our findings also contribute to a growing literature that considers the factors that influence PCAOB enforcement and sanction severity.

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https://doi.org/https://doi.org/10.2308/jfar-2024-014

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@article{erik2025,
  title        = {{An Analysis of PCAOB Enforcement When Auditors Violate Fraud-Related Audit Standards}},
  author       = {Erik S. Boyle et al.},
  journal      = {Journal of Forensic Accounting Research},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/jfar-2024-014},
}

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An Analysis of PCAOB Enforcement When Auditors Violate Fraud-Related Audit Standards

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.