In official international trade statistics, annual commerce between every pair of countries is reported twice: once by the importing country and once by the exporter. These double reports provide an opportunity for audit. In principle, the two reported trade values should differ systematically...

We introduce costly verification into a general delegation framework. A principal faces an agent who is better informed about the efficient action but biased towards higher actions. An audit verifies the agent's information, but is costly. The principal chooses a permissible action set as a...

In this paper, we compare subjective principal assessments of teachers to the traditional determinants of teacher compensation ¡V education and experience ¡V and another potential compensation mechanism -- value-added measures of teacher effectiveness based on student achievement gains. We...

This paper examines changes in the role that auditors play in corporate tax planning following recentevents, including the well-known accounting scandals, passage of the Sarbanes-Oxley Act, andregulatory actions by the SEC and PCAOB. On the whole, these events have increased thesensitivity to...

Due to imperfect transparency and costly auditing, trust is an essential component of financial intermediation. In this paper we study a sample of 444 due diligence (DD) reports from a major hedge fund DD firm. A routine feature of due diligence is an assessment of integrity. We find that...

We examine whether examiners were informed and contributed to the health of the banking sector. Information included quantitative information that was eventually made public, quantitative information that remained private, and subjective information dependent on the examiner's production of...

This paper studies the impact of public audit oversight on financial reporting credibility. We analyze changes in market responses to earnings news after public audit oversight is introduced, exploiting that the regime onset depends on fiscal year-ends, auditors, and the rollout of auditor...

Insiders can artificially deflect the market prices of financial instruments from their full-information or inside value' by issuing deceptive accounting reports. Incentive support for disinformational activity comes through forms of compensation that allow corporate insiders to profit...

In many regulated markets, private, third-party auditors are chosen and paid by the firms that they audit, potentially creating a conflict of interest. This paper reports on a two-year field experiment in the Indian state of Gujarat that sought to curb such a conflict by altering the market...