Pagano, Marco; Immordino, Giovanni - In: CESifo economic studies : CESifo, a joint initiative of … 53 (2007) 3, pp. 363-388
We study regulation of the auditing profession in a model where audit quality is unobservable and enforcing regulation is costly. The optimal audit standard falls short of the first-best audit quality, and it is increasing in the riskiness of firms and in the amount of funding they seek. The...
