Selina Chhantyal, “Auditing Standard Setting: Sources Of Information, Economic Cycle, And Politics.”
Mentor: Colleen Boland, Business, Business (Sheldon B. Lubar School of)
Poster #99
Audit standards shape financial transparency and corporate accountability, yet the extent to which standard-setting bodies integrate public input remains uncertain. This study examines the responsiveness of audit standard setters, including standards issued by the PCAOB (Public Company Accounting Oversight Board) and the SAS (Statements on Auditing Standards), to stakeholder feedback. By analyzing public comment letters and corresponding PCAOB auditing standards, this research seeks to identify patterns in how feedback is incorporated, or ignored. A key aspect of this study was leveraging artificial intelligence to assist in data organization and analysis. AI-generated prompts were developed to systematically examine public comment letters and detect recurring themes in stakeholder concerns. By comparing public comment letters to the final text of PCAOB standards, this study evaluates whether certain stakeholders, such as large firms or investor groups, have greater influence in regulatory decision-making. Additionally, this research explores whether certain types of comments (e.g., those addressing audit complexity, cost, or investor protection) are more likely to be reflected in final standards than others. Preliminary findings suggest that regulatory responsiveness varies depending on the nature of the feedback and the type of stakeholder providing input. This research contributes to the ongoing discussion on regulatory transparency and standard-setting accountability, offering insights into how external influence may shape auditing regulations. By integrating AI, it also highlights how technology can enhance qualitative research methods in auditing. These findings suggest that while standard setters consider public input, certain voices may hold greater influence in shaping auditing regulations than others. This has broader implications for regulatory fairness and transparency, particularly in ensuring that audit standards reflect the needs of a diverse set of stakeholders rather than a select few. A better understanding of these dynamics can inform policymakers and regulatory bodies on ways to improve stakeholder engagement in the standard-setting process.