Firm Corruption in the Presence of an Auditor

Michael Dietrich, Jolian McHardy and Abhijit Sharma ()

Review of Economic Analysis, 2016, vol. 8, issue 2, 97-124

Abstract: "We develop a theoretical framework exploring firm corruption accounting for interactions with an auditor who provides auditing and other services. A multiplicity of equilibria can exist including stable corruption and auditor controlled corruption. Whilst fining the auditor cannot eliminate all corruption, fining the firm can, but marginal increases in this fine can also have perverse effects. Investing in corruption detection may be effective in deterring auditor corruption but ineffective in deterring firm corruption. Policy effectiveness is highly dependent upon several factors which may be hard to observe in practice making general rules about policy interventions to address corruption very difficult."

Keywords: Firm Corruption; Auditor Corruption (search for similar items in EconPapers)
JEL-codes: D73 K42 L21 (search for similar items in EconPapers)
Date: 2016
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http://rofea.org/index.php?journal=journal&page=ar ... D=282&path%5B%5D=154 (application/pdf)

Related works:
Working Paper: Firm Corruption in the Presence of an Auditor (2012)
Working Paper: Firm corruption in the presence of an auditor (2010)
Working Paper: Firm corruption in the presence of an auditor (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ren:journl:v:8:y:2016:i:2:p:97-124

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