This paper models the demand by auditors for bright-line financial reporting standards, and compares auditors' preferences for bright-line standards with managers' and regulators' preferences. Bright-line standards are unambiguous, requiring no judgment in their application. Standards that are...

Some companies now outsource their internal audit function to public accountants. Internal auditors and accounting firms disagree about the merits of outsourcing. Each type of auditor claims to provide more cost-effective services and appears to claim superior expertise. This paper uses agency...

The purpose of this paper is to examine an auditor?s decision to investigate for fraud, when a manager with exogenous incentives to misreport chooses the quality of internal controls. I extend the strategic auditing literature by allowing the manager both a choice with respect to fraud and a...