This paper studies how legal liability due to negligence can weaken or strengthen an auditor's reputation concerns in … threshold for the level of due care. When the negligence standard is lax, legal liability can weaken the auditor's reputation …. When the standard is stringent, noncompliance is less costly for the auditor, but legal liability strengthens reputation …

This study examines whether boards of directors use external auditing to protect their reputation capital. We … hypothesize and find that audit quality increases with the level of directors' reputation capital. More specifically, using ten …-year panel data on Finnish listed companies, we find that our measures of reputation capital based on the number of directorships …

results extend the theory to classic models in finance such as Leland and Pyle (1977), Glosten (1989), and DeMarzo and Duffie …

securitization markets, mitigate problems of asymmetric information and adverse selection in loan sales. Our theory provides an …