Intermediary Independence: Auditors, Financial Analysts and Rating Agencies
Patrick C. Leyens
University of Hamburg - Institute of Law and Economics, Faculty of Law; Max Planck Institute for Comparative and International Private Law
April 1, 2011
Journal of Corporate Law Studies, Vol. 11, pp. 33-66, April 2011
Auditors, ﬁnancial analysts and rating agencies are the most important specialised information intermediaries in capital markets. Information intermediation serves to increase the credibility of issuer disclosure and overcome investor uncertainty. A certain minimum level of independence is the basic prerequisite for information intermediation to be operative. All intermediaries face similar problems in regard to impairments of their independence. Legal standards on independence should be based on a consistent theory. Common principles carved out under contract law serve as an inventory for developing a market-based model of independence. This paper argues that independence should be understood as a correlative to market access. Independence as a correlative to market access should guide the assessment of convergence and remaining divergence in the independence standards applicable to auditors, ﬁnancial analysts and rating agencies.
Number of Pages in PDF File: 34
Keywords: Information Intermediaries, Corporate Governance, Intermediaries, Independence, Intermediary Independence, Auditors, Financial Analysts, Rating, Rating Agencies, Principles, Contract Law
JEL Classification: G1, G2, G3, F36, K00, K22, L14, L51Accepted Paper Series
Date posted: September 5, 2011
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