This paper aims to evaluate the private and social gains of shareholder activism in an optimal contracting framework involving dispersed shareholders who may become active. The social gains are based on the welfare to stake holders in the firm, whereas the private gains are based on shareholder...

The last decades have seen a dramatic increase in litigation against auditors. This paper introduces a model, in which auditors differ in their levels of skill, where differences in levels of skill may or may not be observable and reflect differences in knowledge or audit technology. This model...

This paper introduces a model of the market for audit services in which auditors differ in their levels of skill, which may or may not be observable and capture differences in ability. The model captures the interplay amongst auditing standards, litigation, and auditors’ levels of skill, which...