search query: @author Martimort, D. / total: 7
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Author: | Faure-Grimaud, A. Laffont, J-J. Martimort, D. |
Title: | The endogenous transaction costs of delegated auditing |
Journal: | European Economic Review
1999 : APR, VOL. 43:4-6, p. 1039-1048 |
Index terms: | AUDITING MODELS RISK AVERSION INFORMATION TRANSACTION COSTS COMPANIES |
Language: | eng |
Abstract: | The paper analyzes the deadweight loss of delegated auditing in a three-tier hierarchy. In a costly-state verification model, this cost depends on the endogenous information structure, the auditor's degree of risk-aversion and the size of the punishment. There is the optimal contractual outcome of this delegation model identified with the solution obtained in a standard three-tier hierarchical model of collusive auditor. Then, it is derived from this identification the set of parameters of the physical environment which may affect the efficiency of side-contracting within the firm. |
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