audit standard equal to q*  for any R。

One may wonder whether, rather than banning the joint provision of audit and non-audit services, the regulator may not limit its intervention simply to mandating disclosure of information about the identities of the auditor and the consultant of the firm, trusting that shareholders will interven to forbid the joint provision of the two types of service in the regions where this is inefficient。 However, in our setting mandatory disclosure would not prevent collusion between managers and auditors, due to the assumption of collective action problems among shareholders。 Indeed starting from 2000 the SEC had already mandated firms to disclose audit and nonaudit fees paid to their auditors, hoping to provide investors with transparent information about the auditor- client relationship。 The approval of SOX in 2002 indicates that this disclosure was not deemed sufficient to achieve the desired degree of auditors’ independence。论文网

As explained above, the results of Proposition 4 rest on the balance between the two conflicting effects of the rent R earned in the provision of non-audit services: on the one hand, easier capture of auditors by managers; on the other, efficiency gains from economies of scope。 Various papers have attempted to measure empirically which of these two effects dominates。 Some studies have documented that unexpected increases in non-audit fees have a negative or insignificant effect on the abnormal returns of companies (Frankel, Johnson and Nelson, 2002, Ashbaugh, Lafond and Mayhew, 2003, and Chaney and Philipich,2002)。 Other studies have instead uncovered some evidence of economies of scope (Simunic, 1984; Palmrose, 1986; Parkash and Venable, 1993, Antle, Gordon, Narayanmoorthy and Zhou, 2004)。 In particular, the recent paper by Cho, Han and Brown (2006) finds that non-audit fees have a positive effect on the value relevance of accounting information, upon testing whether the response of market prices to accounting information depends on the ratio between audit and non-audit fees paid by the corresponding company。

6。Conclusion

The recent corporate scandals have highlighted the need for tighter regulation of the audit profession。 However, once it is recognized that the enforcement of such regulation is costly, three important lessons can be drawn concerning the optimal standards to be imposed on auditors。

First, audit quality standards must be based on a cost-benefit analysis of audit activity。 On the cost side, they must be less ambitious in economies that have less efficient enforcement。 On the benefit side, they must be tighter in economies where the fraction of bad investments is larger or companies seek more external funding。

Second, regulatory standards must be less ambitious when auditors can collude with the managers of client companies at the expense of shareholders, because deflecting the potential for collusion requires more intensive – and therefore costlier – enforcement。

Third, if client firms may “bribe” their auditors by offering them generous consulting contracts, regulators can eliminate the source of collusion by forbidding auditors to provide consulting services。 This policy prescription is not always warranted since the joint provision of auditing and consulting services may also generate socially valuable economies of scope。 Banning such joint provision is socially inefficient if the associated conflict of interest is not too acute, and if enforcement is so efficient as to keep this conflict in check at relatively low cost for society。

摘要：我们研究的审计行业监管模型，其中审计质量是不可观测的并且强化管制是昂贵的。最佳审计标准达不到最好的审计质量，并在增加公司的风险程度和他们所寻求的资金总量。该模型可以包括客户和审计人员的合谋，由提供联合审计和咨询服务引起的：转变审计合谋并不需要雄心勃勃的标准。最后，禁止审计师提供咨询服务从而消除合谋，但在现存的经济范围中可能不是最佳的。