Writing to the PCAOB and SEC: Examining Auditors’ Formal Communications During Standard Setting

ABSTRACT

This paper examines how shifts in regulatory authority influence communication in audit standard setting. We analyze comment letters submitted to the SEC and PCAOB from 2002 to 2017, focusing on differences in the language used by audit firms and issuers. We distinguish between the PCAOB’s Young (2002–2008) and Mature (2008–2017) periods, which reflect changes in uncertainty, enforcement, and institutional authority. These conditions shape how participants engage with regulators. The analysis reveals systematic but uneven shifts in tone, analytic content, and rhetorical stance across periods. Auditors adjust their language as the PCAOB’s authority becomes more established, whereas issuers’ communication remains comparatively stable. By tying these patterns to institutional change, the study shows how regulatory transformations alter participation in standard setting and underscores the role of language in that process.

Data availability: Comment letter data are available from PCAOB and SEC websites, respectively.

JEL Classifications: M42; M48.