), and firms have the option of auditing to learn workers’ productivities. Audits are costly and non–contractible. We … characterize the trade–offs between signaling by workers and costly auditing by firms. Auditing is always associated with (partial … feature new auditing patterns and explain empirical observations in labor economics like wage differentials and comparative …

research, informed by a theoretical lens based on resource dependence and legitimacy, enriches existing auditing literature …

upper bound. -- auditing ; reputation ; adverse selection ; auditor independence …