State-Dependence and Conditional Audit Policy

Autor:	Chun Chen Lee, Ruey-Ji Guo, Yenpao Chen
Rok vydání:	2013
Předmět:	Information asymmetry Actuarial science Internal audit Joint audit health services administration Principal–agent problem Punitive damages Audit Business Audit plan Performance audit
Zdroj:	Theoretical Economics Letters. :22-30
ISSN:	2162-2086 2162-2078
DOI:	10.4236/tel.2013.35a2005
Popis:	This paper investigates how the state-dependence between two periods affects the optimal audit decision. Using a principal-agent model, based on a state-dependent assumption, we find that it is desirable to use a conditional (punitive) audit mechanism when the agent’s under-declaration benefit is significant and the principal’s audit cost is moderate. In that case, the audit policy for the current period will be contingent on the audit result in the preceding period.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::01f152af5f83d520b0f105965ee790e5 https://doi.org/10.4236/tel.2013.35a2005 Zobrazit plný text záznamu