The Reliability of the Disclosure of Auditor Changes by the Public Accounting Report

The Public Accounting Report (PAR) provides a source of information often cited by various accounting studies and congressional reports. The reliability, completeness, and timeliness of the disclosures of auditor changes reported in this newsletter were evaluated. The evaluation was done by comparing 8-K filings made with the Securities & Exchange Commission (SEC) to the disclosures published in PAR. The findings indicate that the disclosures were not complete and that they were not reliable with respect to the disclosure of qualified opinions given by the old auditing firm. However, the PAR data appear to be reliable in identifying the old and new auditing firm, disclosure of accounting disagreements, and the reporting of miscellaneous information contained in the 8-K filings. The disclosures published in PAR lag the 8-K filings by approximately 6 months. Nevertheless, the reliability of the data and the additional interview data that PAR obtains provide researchers with a valuable database for studying auditor changes.