The Role of Regulation and Oversigh

The Role of Regulation and Oversight

There is considerable accounting research on fraud in one aspect of regulation: AU 316-
mandated brainstorming (Brazel, Carpenter, and Jenkins 2010; Carpenter 2007; Hoffman and
Zimbelman 2009; Trotman, Simnett, and Khalfia 2009). There is also a great deal of research on
SOX-mandated audit partner rotation (e.g., Chi, Huang, Liao, and Xie 2009), and limited research
on audit firm rotation (e.g., Arel, Brody, and Pany 2006; Dopuch, King, and Schwartz 2001), which
is currently under consideration by the Public Company Accounting Oversight Board (PCAOB),
the European Commission (EC), and the United Kingdom Competition Commission (UKCC).
However, this research primarily considers the effect of the regulation (or potential regulation) on
audit quality—not specifically on fraud detection or deterrence. Non-accounting research in fraud
could inform practitioners and researchers with respect to future studies and best practices in this
area