Audit Standards and Auditor Liability: A Theoretical Model

Willekens, Marleen; Steele, Anthony; Miltz, David

doi:10.1080/00014788.1996.9729515

Cited by 38 publications

(27 citation statements)

References 23 publications

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“…This result is consistent with prior theoretical findings such as Varian [33]. This is a unique characteristic of this security configuration as in all other security configurations, such as the serial configuration which we next discuss, we will see the firm investing in and balancing both security controls.…”

Section: Parallel Configurationsupporting

confidence: 90%

“…In an attempt to analyze the issue of security standardization under the presence of un-규제할 수 없는 보안통제가 존재하는 경우 보안 규제 설정 101 verifiable security control, we built a gametheoretical model on Varian [33] work that considers two controls. The purpose of these two controls is to jointly pursue digital assets protection.…”

Section: Introductionmentioning

confidence: 99%

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Security Standardization for Social Welfare in the Presence of Unverifiable Control

Lee¹

2017

The Journal of Society for e-Business Studies

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Standard makers in both private and public sectors have been increasingly mandating security standards upon organizations to protect organizational digital assets. A major issue in security standardization is that standards often cannot regulate all possible security efforts by the standard maker because some efforts are unverifiable by nature. This paper studies from an analytical perspective how a standard maker should design the standard using a verifiable security control in the presence of another related unverifiable one. We compare it with two benchmark standards; naïve-standard which refers to the standard maker who ignores the existence of the unverifiable control, and complete-information standard which refers to the maker sets standards on both controls. Optimal standard and benchmark standard depend critically on how the two controls are configured. Under parallel configuration, the existence of the unverifiable control induces the policy maker to set a higher standard (the complete-information standard is optimal); under serial configuration, a lower standard is applied (neither benchmark works). Under best-shot configuration and if the verifiable control is more cost-efficient, the existence of the unverifiable control has no impact on the optimal standard (the naïve standard is optimal).

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Section: Parallel Configurationsupporting

confidence: 90%

Section: Introductionmentioning

confidence: 99%

Security Standardization for Social Welfare in the Presence of Unverifiable Control

Lee¹

2017

The Journal of Society for e-Business Studies

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“…In the model presented here the case of joint and several liability implies a constant D, whereas the case of proportional liability implies a D decreasing in q. 7 This cost function is similar to the one used by Dye (1993a), Willekens et al (1996) and Frantz (1999). 8 This condition guarantees that marginal cost is always positive.…”

Section: Appendixmentioning

confidence: 98%

“…Dye, 1993aDye, , 1993bNarayanan, 1994;Willekens et al, 1996). All these papers focus on the case of one auditor auditing one client.…”

Section: Related Literaturementioning

confidence: 99%

International regulation of audit quality: full harmonization or mutual recognition? An economic approach

Trombetta

2003

European Accounting Review

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The market for audit services is modelled as a market with vertical product differentiation, rigid demand, third-party externalities and a liability rule. This framework is used to choose between full harmonization and mutual recognition as possible international regulatory regimes for audit quality. It is shown that if third-party externalities are zero, then full harmonization is at least as good as mutual recognition. If, however, externalities are not zero, then mutual recognition can yield a higher level of social welfare than full harmonization. These results are relevant for the debate on the international regulation of the provision of audit services, especially within the EU, and show that full harmonization is not necessarily the best option.

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“…On the other hand, some authors (Willekens et al, 1996) considered the issuing of audit standards and guidance statements as a form of self-regulation at a time when the accounting professional monopoly on regulation is being threatened. However, van Peursem et al (2005) indicated that the accountancy professions create a manner of 'self' through their standards.…”

Section: Figure 4: the Expectation Gap II (The Expectation Gap Betweementioning

confidence: 99%

The consideration of environmental matters in the audit of financial reports

Chiang¹

2010

Journal of Accounting &Amp; Organizational Change

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Audit Standards and Auditor Liability: A Theoretical Model

Cited by 38 publications

References 23 publications

Security Standardization for Social Welfare in the Presence of Unverifiable Control

Security Standardization for Social Welfare in the Presence of Unverifiable Control

International regulation of audit quality: full harmonization or mutual recognition? An economic approach

The consideration of environmental matters in the audit of financial reports

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