Maintaining Auditor Independence
AbstractIn this paper, we resolve the auditor independence problem that arises in the model studied in Antle (1982, 1984). We argue that the owner-manager-auditor relationship exhibits a "separability" that facilitates the use of a particularly simple mechanism that prevents collusion. The mechanism prevents collusion as long as th e agents do not play strictly dominated strategies and assume the same to be true of the other agent; the owner's profits under this mechanism are arbitrarily close to second-best (the optimal Nash contract). The fact that a simple mechanism can be used to maintain auditor independence in a theoretical model strengthens our belief that, in practice, there exist institutions (e.g., the courts) that can maintain auditor independence with relative ease. This may be one reason why the institution of auditing is so enduring.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Ohio State University in its series Corporate Finance & Organizations with number _017.
Date of creation:
Date of revision:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Marcelo Caffera & Juan Dubra, 2005. "Getting Polluters to Tell the Truth," Microeconomics 0504008, EconWPA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.