An Economic Analysis of Auditor Independence for a Multi-Client, Multi-Service Public Accounting Firm
33 Pages Posted: 3 Sep 2009
Date Written: October 20, 1997
This paper provides an economic analysis of multi-client, multi-service accounting firms. The objective is to aid in the development of a new framework for auditor independence. We adopt the modern theory of the economics of organization, which views organizational structures and relationships as the results of efforts to create and deliver value. We see auditor independence as a property of auditors' interests, both at a personal level and at the level of the accounting firm. A proper assessment of auditors' interests requires a holistic approach. That is, in assessing auditor independence, we must examine the totality of auditors' interests. We identify and analyze a complex web of institutional and personal incentives that affect auditors' interest
Keywords: auditor independence, economic analysis, public accounting firm
JEL Classification: M41, M44, M49
Suggested Citation: Suggested Citation
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