Incentives for Auditor Collusion in Pre-Sarbanes-Oxley Regulatory Environment
Posted: 30 Mar 2007
Date Written: March 20, 2007
This paper develops a single-play game theory model that looks at the strategic interactions between auditors and managers. This paper adds to the literature by explicitly modeling the possibility of collusion in a context where the outcome is unverifiable and the manager has the possibility of funding side-payments in such a way that they have little effect on his personal payoff.
Keywords: Auditing, Collusion, Game theory
JEL Classification: C72, D82, G18, G38, K22, M49, M41
Suggested Citation: Suggested Citation