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Unformatted text preview: 1. State the pros and cons of those comments 2. Evaluate whether the Sarbanes-Oxley Act and PCAOB regulation are worth their cost. Competitive Pressures to do Quality Work Pros: 1. 2. 3. 4. Cons: 1. 2. 3. 4. 5. 6. Competitive Pressures to do Quality Work Pros: 1. promotes innovativeness and efficiency 2. SOXs compliance is more difficult for nonBig 4 3. Lower costs past on to society 4. Better confidentiality 5. No interference from the government Cons: 1. Fees down -> costs down substandard auditing 2. Short run profit maximizers may hurt profession 3. Wages lower -> attract less talented students 4. Less cooperation among firms 5. Profession less collegial 6. Less sharing of knowledge -> more inefficiency 7. Marx -> duplication of function e.g., more spent on advertising...
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- Fall '08