Law Commons^™

The Regulation Of Public Auditing In Canada And The United States: Self-Regulation Or Government Regulation?, Adam C. Pritchard, Poonam Puri

Other Publications

Auditors play an important role as gatekeepers to public capital markets. By attesting to the accuracy of a company’s financial statements, the auditor lends its credibility to that company and its financial health.

Both market and legal mechanisms play a role in ensuring that auditors perform high quality audits. Reputation is critical in the market for auditors. In addition, potential legal liability to issuers and investors arising from contract, tort, and statutory securities laws creates incentives for auditors to conduct high quality audits. Potential discipline by professional self-regulatory bodies also plays a part. Striking the appropriate balance among market-based, legal, …