A new academic study finds that audit firms that are distant from SEC regional offices seem to face less enforcement.
It goes without saying that free-wheeling auditors prefer to keep their distance from the Securities and Exchange Commission. But now a new study suggests that the benefit of staying away from the SEC may be literal as well as figurative.
Auditors located farther away from the SEC's 11 regional offices are less independent from their clients, because they feel less likely to get "caught" and punished for misdeeds, according to the study, by Mark Lefond of the University of Southern California, Jere Francis of the University of Missouri, and Xuesong Hu of the University of Oregon.
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