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Independent Auditors as Fiscal Gatekeepers

International Review of Law and Economics

Posted: 12 Nov 1998  

Luigi A. Franzoni

University of Bologna - School of Economics, Management, and Statistics

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This paper analyses the implications of mandatory attestation of tax returns. Attestations are provided by independent auditors competing on price. The paper identifies the conditions under which gatekeeping is socially desirable.

In the most general set-up, in which the detection of erroneous attestations depends on the effort exerted by the Revenue Service, gatekeeping proves to improve social welfare when: 1) the private audit cost is low; 2) the share of liability placed on the auditor is large; 3) the tax placed on liable taxpayers is high; and 4) the incentives for the Revenue Service to carry out investigations are otherwise low.

Notes: This is a description of the paper and not the actual abstract.

JEL Classification: H29, M49

Suggested Citation

Franzoni, Luigi A., Independent Auditors as Fiscal Gatekeepers. International Review of Law and Economics. Available at SSRN:

Luigi Alberto Franzoni (Contact Author)

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 2
40126 Bologna
IT-051-2098488 (Phone)
IT-051-221968 (Fax)


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