An Economic Analysis of Auditor Independence for a Multi-Client, Multi-Service Public Accounting Firm

33 Pages Posted: 3 Sep 2009

See all articles by Rick Antle

Rick Antle

Yale School of Management

Paul A. Griffin

University of California, Davis - Graduate School of Management; University of California, Davis

David Teece

Institute for Business Innovation

Oliver E. Williamson

University of California, Berkeley - Business & Public Policy Group

Date Written: October 20, 1997

Abstract

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

Antle, Rick and Griffin, Paul A. and Teece, David J. and Williamson, Oliver E., An Economic Analysis of Auditor Independence for a Multi-Client, Multi-Service Public Accounting Firm (October 20, 1997). Available at SSRN: https://ssrn.com/abstract=1466963 or http://dx.doi.org/10.2139/ssrn.1466963

Rick Antle

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-6048 (Phone)

Paul A. Griffin (Contact Author)

University of California, Davis - Graduate School of Management ( email )

3102 Gallahger Hall
Davis, CA 95616
United States
(530) 752-7372 (Phone)
(425) 799-4143 (Fax)

HOME PAGE: http://www.gsm.ucdavis.edu/griffin/

University of California, Davis ( email )

3102 Gallahger Hall
Davis, CA 95616
United States
(530) 752-7372 (Phone)
(425) 799-4143 (Fax)

HOME PAGE: http://www.gsm.ucdavis.edu/griffin/

David J. Teece

Institute for Business Innovation ( email )

F402 Haas School of Business, #1930
Berkeley, CA 94720-1930
United States
(510) 642-4041 (Phone)

Oliver E. Williamson

University of California, Berkeley - Business & Public Policy Group ( email )

545 Student Services Building
Berkeley, CA 94720
United States
510-642-8697 (Phone)
510-642-4700 (Fax)

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