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Article Summary and Review
Journal Journal of Accounting and Economics
Synopsis and comment Fung et al. (2017) conducted a study to determine how effective the PCAOB (Public Company Accounting Oversight Board) program for international inspection was in improving audit quality for foreign public company clients whose audit procedures were conducted by PCAOB-registered non-US auditors. According to the authors, this program was not necessarily intended to benefit non-US listed companies, but the advantages could trickle down to them if foreign auditors auditing US-listed firms applied PCAOB standards in all their work.
Although Fung et al. believe that foreign auditors have little incentive to follow PCAOB inspection rules when working with non-US clients who are outside the jurisdiction of the PCAOB, the reputation of these auditors rises once they register with PCAOB and pass their initial PCAOB inspections. According to Fung et al., (2017, p.29), some of the factors that contribute to an increase in audit quality in non-US countries include: early initial PCAOB inspections, affiliation with the six global audit firm networks like Deloitte Touche Tohmatsu Limited and PricewaterhouseCoopers International Limited, high local liability standards, increases in financial reporting enforcement in the auditor’s home country, and the likelihood for PCAOB inspection.
In my opinion, it is highly unlikely for the PCAOB international inspection program to independently increase the audit quality of non-US auditors who comply with PCAOB regulations.

It takes the personal ethic of the auditor to comply with the law regardless of whether an inspection is imminent or not, so the quality of an audit report cannot only be determined by external factors. It is time that auditors learn to hoard experience from the procedures laid down by regulatory bodies so that they can build a lasting reputation with or without inspections.
Reference Fung, X. Y. K, Raman, K. K, and Zhu, X. (2017) Does the PCAOB International Inspection Program Improve Audit Quality for Non-US-Listed Foreign Clients? Journal of Accounting and Economics, 64(2), 15-36.

Work Cited
Fung, Simon Yu Kit, K. K. Raman, and Xindong Kevin Zhu. “Does the PCAOB international inspection program improve audit quality for non-US-listed foreign clients?.” Journal of Accounting and Economics 64.1 (2017): 15-36.