Accounting Faculty Paper Accepted for Publication

September 13, 2018

head shots of Elizabeth Johnson, Ken Reichelt and Jared Soileau

Elizabeth Johnson, Ken Reichelt and Jared Soileau 

BATON ROUGE – An LSU accounting graduate collaborated with two LSU Department of Accounting faculty on a paper that was recently published online in The Journal of Accounting Literature. “No news is bad news; Do PCAOB part II reports have an effect on annually inspected firms’ audit fees and audit quality” was written by Elizabeth Johnson, an assistant professor at Florida Gulf Coast University and LSU accounting PhD alumna, Professor Ken Reichelt and Associate Professor Jared Soileau.

Johnson, Reichelt and Soileau find that annually inspected audit firms suffered reputational loss following the one-year PCAOB Part II remediation period based on reduced audit fees. They also find that during this same period the same audit firms took remedial efforts to improve audit quality in the form of lower abnormal accruals and reduction in the frequency of restatements compared to prior periods.

The paper is based on Johnson’s dissertation and is noteworthy because it is the first to consider the effect of the potential release of PCAOB Part II reports on audit fees and audit quality of annually inspected (largest) audit firms. The findings also provide evidence that the PCAOB inspection process is meeting its objective of improving audit quality. The article appears online; the abstract is available at sciencedirect.com/science/article/pii/S0737460717300101. The paper will also be published in the journal’s December 2018 print edition.

 

About the Department of Accounting

The Department of Accounting at LSU’s E. J. Ourso College of Business strives for excellence in teaching, research and service to the accounting profession. With a mission of producing graduates on every level who excel in their pursuits. We prepare students for careers in public accounting, industry, governm​ent and academia through required and elective courses in financial accounting, cost, audit, taxation, and internal audit. For more information, visit our home page, call 225-578-6202 or email accounting@lsu.edu.

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Contact: Angela McBride
225-578-7833
amcbride@lsu.edu