Time/时间：9月4日（周四）10:00-11:30

Venue/地点：Room 501, Jiageng Building 2/嘉庚二号楼501教室

Topic/题目：Cross-task spillover effects of PCAOB Inspections

Speaker/报告人：Gans Narayanamoorthy, Professor of Accounting, Tulane University

Facilitator/主持人：胡金帅教授

Abstract/摘要：

This study investigates whether the Public Company Accounting Oversight Board’s (PCAOB) inspection focus in one audit area enhances or undermines auditor performance in another area within the same engagement. We examine property and casualty (P&C) insurance audits, where two judgment-intensive tasks—fair value estimation of investment securities (FVEIS) and loss reserve (LR) estimation—coexist but face unequal PCAOB scrutiny. While both tasks share similar estimation techniques and auditing standards, prior commentary suggests inspectors disproportionately emphasize FVEIS, potentially diverting attention away from loss reserves, which pose greater misstatement risk. Using inspection reports and statutory filings from 2011 to 2019, we measure PCAOB emphasis as the intensity of deficiencies in FVEIS and assess spillover effects on subsequent LR audit accuracy. Consistent with the distraction hypothesis, we find that greater PCAOB emphasis on FVEIS leads to lower accuracy of LR estimates for public insurers, with a one-standard-deviation increase in FVEIS deficiency intensity associated with an 11% rise in LR errors relative to the mean. No such effect appears for private insurers, validating our identification strategy. Further, we show that the distraction effect weakens when FVEIS are more material or more difficult to audit, suggesting that PCAOB’s misplaced focus is most costly when less justified by underlying risks. We find little evidence of focal benefits for FVEIS, underscoring a potential misallocation of regulatory attention. Overall, our study highlights the cross-task tradeoffs induced by inspection pressure and contributes to debates on the effectiveness, efficiency, and future design of audit oversight.

About the Speaker/报告人简介：

Professor Gans Narayanamoorthy is the Faculty Director of Online MBA Program and Jayne Ritchey Cohen Chair of Business Administration at Tulane University. His research focuses on capital markets in accounting, with particular emphasis on market efficiency, litigation risk, regulation, insurance and bank accounting. He has published extensively in all the top accounting journals. Professor Narayanamoorthy brings a rich professional background to Tulane. Before entering academia, he worked as an investment banker, managing public offerings of large corporations, including Fortune 500 companies. As a teacher, Professor Narayanamoorthy enjoys working with doctoral students and has served on fifteen Ph.D. committees to date. He appreciates Freeman's collegial atmosphere, especially the rewards of working alongside like-minded colleagues who are engaged in teaching and research and excited about growing the school.