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Full-Text Articles in Law
The Next Generation: Milhaupt And West On Japanese Economic Law, Kent Anderson
The Next Generation: Milhaupt And West On Japanese Economic Law, Kent Anderson
Michigan Journal of International Law
Review of Economic Organizations and Corporate Governance in Japan: The Impact of Formal and Informal Rules by Curtis Milhaupt & Mark West
The Irrational Auditor And Irrational Liability, Adam C. Pritchard
The Irrational Auditor And Irrational Liability, Adam C. Pritchard
Articles
This Article argues that less liability for auditors in certain areas might encourage more accurate and useful financial statements, or at least equally accurate statements at a lower cost. Audit quality is promoted by three incentives: reputation, regulation, and litigation. When we take reputation and regulation into account, exposing auditors to potentially massive liability may undermine the effectiveness of reputation and regulation, thereby diminishing integrity of audited financial statements. The relation of litigation to the other incentives that promote audit quality has become more important in light of the sea change that occurred in the regulation of the auditing profession …