Audit quality: Attributes, private safeguards and the role of regulation
Benito Arruñada
Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Abstract:
This article examines the private mechanisms used to safeguard quality in auditing, with a view to defining rules capable of facilitating the performance of market forces. An outline is given of a general theory of private quality assurance in auditing, based on the use of quasi-rents to self-enforce quality dimensions. Particular attention is paid to the role of fee income diversification as the key ingredient of private incentives for audit quality. The role of public regulation is then situated in the context defined by the presence of these safeguard mechanisms. This helps in defining the content of rules and the function of regulatory bodies in facilitating and strengthening the protective operation of the market. By making sense of the interaction between regulation, quality attributes and private safeguards, the analysis helps to evaluate the relative merits of different regulatory options.
Keywords: Auditing; quality; self-enforcement; regulation; diversification (search for similar items in EconPapers)
JEL-codes: K22 K23 M40 (search for similar items in EconPapers)
Date: 2000-01
New Economics Papers: this item is included in nep-law and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)
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Journal Article: Audit quality: attributes, private safeguards and the role of regulation (2000) 
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:452
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