Table 6.
Results of Estimation of the Study’s Equation (n = 234)
| Variable | Predicted sign | A | B | C |
|---|---|---|---|---|
| Intercept | 1.791 | 1.861 | 1.788 | |
| PCAOB Sanction | + | 0.483*** | 0.483*** | 0.479*** |
| Red BOA | – | − 0.861*** | − 0.873*** | − 0.858*** |
| #CPAs | – | − 1.593*** | − 1.598*** | − 1.601*** |
| #Issuers | + | 1.017** | 1.029** | 1.029** |
| State GDP | ± | − 0.010 | − 0.011 | − 0.010 |
| Lag | ± | 0.717*** | 0.717*** | 0.718*** |
| Pre-Doty | ± | 0.179 | 0.170 | 0.163 |
| Late-Doty | ± | − 0.136 | − 0.151 | − 0.151 |
| Non-resident CPA | ± | − 0.577** | − 0.585** | − 0.574** |
| Gender | ± | 0.078 | 0.079 | 0.063 |
| Age | ± | − 0.010 | − 0.011 | − 0.010 |
| Firm size | ± | − 0.315 | − 0.314 | − 0.297 |
| BD | ± | 0.083 | ||
| 2CPAs | ± | 0.090 | ||
| Adj-R2 | 0.411 | 0.408 | 0.408 |
Dependent Variable = BOA Action
BOA Action is a continuous variable of the ordered categorization of BOA actions (Table 5, range 0 to 5)
PCAOB Sanction is a continuous variable of the ordered categorization of PCAOB sanctions (Table 4, range 1 to 5)
Red BOA is an indicator variable equal to one if the governor of the state where the CPA is licensed was a Republican at the date of BOA action, otherwise it is equal to zero
#CPAs is an indicator variable equal to one if the number of CPAs in the state is greater than 10,000, otherwise it is equal to zero
#Issuers is an indicator variable equal to one if the number of issuers in the state is greater than 100, otherwise it is equal to zero
Lag is the number of years between the PCAOB sanction and the BOA action
Pre-Doty and Late-Doty are fixed effect indicator variables representing the three (minus one) time periods included in the study’s analyses
Non-resident CPA is an indicator variable equal to one if the BOA is not located in the CPAs state of residence, otherwise it is equal to zero
Gender is an indicator variable equal to one if the CPA is a woman, otherwise is equal to zero
Age at the date of the PCAOB sanction is a continuous variable
Firm Size is an indicator variable equal to one if the CPA’s firm is annually inspected, otherwise it is equal to zero
BD is an indicator variable equal to one if the PCAOB sanction relates to the audit of a broker-dealer, otherwise it is equal to zero
2CPAs is an indicator variable equal to one if two or more CPAs in a state are associated with the same PCAOB sanction; otherwise, it is equal to zero
*, **, ***Significant at p < 0.05, p < 0.01, p < 0.001, respectively (two-tailed)