Welfare-enhancing fraudulent behavior

• 成果类型: Article
• 署名作者: Lin, Haijin; Sappington, David E. M.
• 署名单位: University of Houston System; University of Houston; State University System of Florida; University of Florida
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-014-9297-4
• 发表日期: 2015
• 页码: 343-370
• 关键词: auditor industry specialization; client bargaining power; corporate governance; liability; BOARD; RISK; fees

摘要

We demonstrate that an increased likelihood of fraud within an organization can benefit both the organization and its auditor. This is the case even though undetected fraud always harms both the organization and the auditor. The increased likelihood of fraud can induce the auditor to increase his auditing effort, which reduces the equilibrium incidence of undetected fraud and thereby benefits both the organization and the selected auditor.