This study investigates the relation between audit regulation and cost of equity capital. There is scant empirical evidence on this relation because changes in audit regulation are frequently accompanied by other major regulatory changes. We exploit variation in the timing of regulatory changes...

This study investigates the relation between audit regulation and the cost of equity capital. While a relation is intuitively appealing, there is a general lack of empirical evidence because changes in audit regulation are frequently accompanied by other major regulatory changes. We exploit...

Regulatory economics suggests that one benefit of public enforcement is the deterrence of improper conduct. Using a difference-in-differences design, we investigate whether a deterrence effect follows the revelation of PCAOB enforcement. We find that large audit firm offices improve audit...