Audit Quality: Attributes, Private Safeguards and the Role of Regulation

The European Accounting Review, 2000, 9(2), 205-224

24 Pages Posted: 19 Jun 2000 Last revised: 23 Jul 2018

See all articles by Benito Arruñada

Benito Arruñada

Pompeu Fabra University - Department of Economics and Business; Barcelona GSE

Multiple version iconThere are 2 versions of this paper

Abstract

This article examines the private mechanisms used to safeguard quality in auditing, with a view to defining rules capable of facilitating the performance of market forces. An outline is given of a general theory of private quality assurance in auditing, based on the use of quasi-rents to self-enforce quality dimensions. Particular attention is paid to the role of fee income diversification as the key ingredient of private incentives for audit quality. The role of public regulation is then situated in the context defined by the presence of these safeguard mechanisms. This helps in defining the content of rules and the function of regulatory bodies in facilitating and strengthening the protective operation of the market. By making sense of the interaction between regulation, quality attributes and private safeguards, the analysis helps to evaluate the relative merits of different regulatory options.

JEL Classification: K22, K23, M49, L14

Suggested Citation

Arruñada, Benito, Audit Quality: Attributes, Private Safeguards and the Role of Regulation. The European Accounting Review, 2000, 9(2), 205-224, Available at SSRN: https://ssrn.com/abstract=224593 or http://dx.doi.org/10.2139/ssrn.224593

Benito Arruñada (Contact Author)

Pompeu Fabra University - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Barcelona GSE ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1,405
Abstract Views
5,070
rank
15,330
PlumX Metrics