Client Responses to Non-Compliant Audits: An Analysis of Clients Targeted by PCAOB Inspection

PCAOB inspectors are afforded privileged insight into the quality of audits selected for inspection. Using inspection reports from 2005-2012, I create a unique sample of audits that were inspected by the PCAOB (i.e., all of an auditor’s clients were selected for inspection). By tracing inspection findings to specific engagements, I directly identify compliant and non-compliant audits. I examine the contributing factors of ‘audit quality’ and provide evidence that higher audit fees and greater human capital are positively related to compliant PCAOB inspections. When PCAOB findings can be linked to a specific engagement, I also find that, on average, the client dismissal rate for deficient auditors is nearly twice as high as the dismissal rate for non-deficient auditors. I further generalize these findings to a larger sample and find some evidence that the smallest auditors are disproportionately impacted by inspection findings. That is, results indicate that client reactions to the PCAOB inspection process are disproportionately greater for the smallest audit firms that have a large proportion of their clients selected for inspection. Finally, I find no evidence that inspection findings affect the fees charged by the auditor and no evidence that the relation between client dismissals and inspection deficiencies has diminished since the initial inspection period. Taken together, these findings have implications for how stakeholders use inspection reports and how the PCAOB conducts and reports on the inspection process

Global Education Handbook: Modules for Teaching Pre-School to Secondary School

This handbook was developed to assist K-12 teachers who wish to introduce a global perspective into their curriculum. The modules were developed by classroom teachers and include such topics as: Anti-bias Curriculum: A Multicultural Perspective,” “The African Influence in Puerto Rican Music,” and “Multicultural Education: An Approach through Beauty, Fashion and Art.” Organized according to grade levels, each module is divided into a series of lessons complete with objectives and a detailed description of materials and activities. It is the purpose of the Global Education Handbook to contribute to networking within the community of educators, locally and globally. The Handbook provides examples of lesson plans and units with a global perspective for use at the pre-school, elementary, middle, and secondary grade levels. It identifies a global network of resources which is available to educators who want to bring the world into their classrooms. Included is an account of an early childhood educator in a rural elementary school in Western Massachusetts who is attempting to instill a global perspective in her curriculum. Her experiences bring to light many of the challenges which confront new and veteran educators who wish to globalize their classrooms and their schools. The Handbook is organized into chapters according to grade level: pre-school, elementary, middle, and secondary. The material within each of these chapters was developed by teachers who implemented these global education units in their classrooms. Each unit is comprised of several lessons that have either a geographic, cultural, or issue-based focus. These resources can be used directly from the Handbook and it is hoped that they will inspire the development of other lessons and units particular to the unique needs of each educator