The impact of audit penalty distributions on the detection and frequency of fraudulent reporting

• 成果类型: Article
• 署名作者: Burton, F. Greg; Wilks, T. Jeffrey; Zimbelman, Mark F.
• 署名单位: Brigham Young University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-011-9152-9
• 发表日期: 2011
• 页码: 843-865
• 关键词: PROSPECT-THEORY; liability regimes; RISK; DECISION

摘要

We investigate how the distribution of the penalties incurred by auditors for failing to detect fraud influences their effort to detect fraud and auditees' commission of fraud. We compare a probabilistic, skewed audit penalty to a penalty that automatically imposes the expected penalty of the probabilistic distribution (hereafter, a deterministic penalty). Our experiments show that a deterministic penalty with the same expected value of a probabilistic, skewed penalty increases audit effort to detect fraud and decreases fraudulent reporting by auditees and that these benefits hold in a game involving both auditee and auditor players.