Auditor Independence at the Crossroads – Regulation and Incentives

14 Pages Posted: 14 Jan 2012 Last revised: 3 Jun 2015

See all articles by Walter Doralt

Walter Doralt

University of Graz (Austria)

Andreas Martin Fleckner

Humboldt University of Berlin - Faculty of Law; Max Planck Institute for Comparative and International Private Law

Klaus J. Hopt

Max Planck Institute for Comparative and International Private Law; European Corporate Governance Institute (ECGI)

Christoph Kumpan

Bucerius Law School

Felix Steffek

University of Cambridge - Faculty of Law

Reinhard Zimmermann

Max Planck Institute for Comparative and International Private Law

Alexander Hellgardt

University of Regensburg - Faculty of Law; Max Planck Institute for Tax Law and Public Finance

Susanne Augenhofer

Humboldt University of Berlin

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Abstract

Trust in the independence of auditors is essential for the functioning of markets. If auditors are not independent or not believed to be independent, transaction costs will rise. In November 2011, the European Commission proposed radical reforms for statutory audits in Europe, fueling heated political and academic debates. We welcome the Commission’s initiative and present cornerstones of a new regulatory framework. With these and related measures, trust in the independence of auditors will be restored and strengthened.

Note: This article is published in this Research Paper Series with the permission of the rights owner, T.M.C. Asser Press.

Keywords: audit, independence, rotation, Big Four, market concentration, internationalization, legal harmonization, standardization

JEL Classification: D43, G15, G18, G38, K22, M42, M48

Suggested Citation

Doralt, Walter and Fleckner, Andreas Martin and Hopt, Klaus J. and Kumpan, Christoph and Steffek, Felix and Zimmermann, Reinhard and Hellgardt, Alexander and Augenhofer, Susanne, Auditor Independence at the Crossroads – Regulation and Incentives. European Business Organization Law Review (EBOR), Vol. 13, No. 1, pp. 89-101, March 2012, DOI: 10.1017/S1566752912000043, Max Planck Private Law Research Paper No. 12/1, Available at SSRN: https://ssrn.com/abstract=1983204

Walter Doralt (Contact Author)

University of Graz (Austria) ( email )

Universitätsstrasse 15
(Zivilrecht)
Graz, 8010
Austria

HOME PAGE: http://zivilrecht.uni-graz.at/de/institut/wissenschaftliche-mitarbeiterinnen/prof-dr-walter-doralt

Andreas Martin Fleckner

Humboldt University of Berlin - Faculty of Law ( email )

Unter den Linden 6
Berlin, D-10099
Germany

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, 20148
Germany

Klaus J. Hopt

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
D-20148 Hamburg
Germany
+49 40 41 90 02 05 (Phone)
+49 40 41 90 03 02 (Fax)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Christoph Kumpan

Bucerius Law School ( email )

Jungiusstr. 6
Hamburg, 20355
Germany

Felix Steffek

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

Reinhard Zimmermann

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, 20148
Germany

Alexander Hellgardt

University of Regensburg - Faculty of Law ( email )

Universitätsstraße 31
Regensburg, 93053
Germany
+49-941-943-2641 (Phone)
+49-941-943-4985 (Fax)

HOME PAGE: http://www.uni-regensburg.de/rechtswissenschaft/buergerliches-recht/hellgardt

Max Planck Institute for Tax Law and Public Finance

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/hellgardt_alexander.html

Susanne Augenhofer

Humboldt University of Berlin ( email )

Spandauer Str. 1
Berlin, Berlin 10785
Germany

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