Date of Award
Fall 2024
Language
English
Embargo Period
11-20-2024
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
College/School/Department
College of Emergency Preparedness, Homeland Security and Cybersecurity
Program
Information Science
First Advisor
Dennis Caplan
Committee Members
Raymond Van Ness, Mark Hudges
Keywords
PCAOB, Standard Setting, Comment Letters, Text Analysis
Subject Categories
Accounting
Abstract
Lobbying is an integral part of the Public Company Accounting Oversight Board’s standard-setting process. Although the PCAOB has been drafting auditing standards for over 20 years, there is still much to learn about how stakeholder behavior in submitting comment letters to the PCAOB varies by interest group, comment period (concept release, proposal, and reproposal), the stakeholder’s position on the proposal, arguments used, and emotional strategies. This paper examines PCAOB Docket 034, which proposed audit report reforms, including the auditor’s disclosure of critical audit matters (CAMs). There was strong stakeholder participation and conflicting opinions when this standard was under discussion. To analyze lobbying behavior, I conducted a content analysis of 489 comment letters addressing the proposed rules by the PCAOB. Findings show that stakeholders use various emotional strategies to influence regulators, with accounting professionals consistently expressing more negative sentiment than the other major stakeholders. Financial statement preparers (i.e., public companies) adopt a more positive tone than accounting professionals when opposing positions, and they use intense language, employing dual strategies of sentiment and intensity across comment periods. Accounting professionals focus on sentiment strategy, sometimes aligning their viewpoints more closely with financial statement users (i.e., investors) than with their audit clients, the preparers. With respect to CAMs, stakeholder participation led the PCAOB to significantly revise its initial proposal. Additionally, I find that machine learning approaches identify lobbying positions more accurately than dictionary-based classification, suggesting that machine learning is the most efficient and reliable methodology for analyzing the textual evidence of comment letters’ stance.
License
This work is licensed under the University at Albany Standard Author Agreement.
Recommended Citation
Yang, Xiaoshuai, "STAKEHOLDERS’ PARTICIPATION IN PCAOB AUDIT STANDARD SETTING" (2024). Electronic Theses & Dissertations (2024 - present). 108.
https://scholarsarchive.library.albany.edu/etd/108
