View/ Open
dietrich_et_al_2016.pdf (722.2Kb)
Download
Publication date
2016-12Rights
© 2016 The Authors. Licensed under the Creative Commons CC-BY-NC license (http://creativecommons.org/licenses/bync/ 3.0/)Peer-Reviewed
YesOpen Access status
openAccess
Metadata
Show full item recordAbstract
We develop a theoretical framework exploring firm corruption accounting for interactions with an auditor who provides auditing and other services. A multiplicity of equilibria can exist including stable corruption and auditor controlled corruption. Whilst fining the auditor cannot eliminate all corruption, fining the firm can, but marginal increases in this fine can also have perverse effects. Investing in corruption detection may be effective in deterring auditor corruption but ineffective in deterring firm corruption. Policy effectiveness is highly dependent upon several factors which may be hard to observe in practice making general rules about policy interventions to address corruption very difficult.Version
Published versionCitation
Dietrich M, McHardy J and Sharma A (2016) Firm Corruption in the Presence of an Auditor. Review of Economic Analysis. 8: 97-124.Link to Version of Record
https://doi.org/10.15353/rea.v8i2.1511Type
Articleae974a485f413a2113503eed53cd6c53
https://doi.org/10.15353/rea.v8i2.1511