Problem
Research questions and friction points this paper is trying to address.
peer review
PCAOB inspection
audit profession
self-regulated
independent government inspection
Audit the Auditors: Commitment versus Professional Judgment
🤖 AI Summary
本文通过构建理论框架，对比自监管同行评审与政府独立检查在审计中的优劣，利用专业判断和预先承诺两种方法解决审计失败问题。
📝 Abstract
This paper provides a theoretical framework to evaluate the trade-off between the self-regulated peer review system and independent government inspection (PCAOB) in the auditing profession. We model the peer review system as a Judgment Regime, where a stakeholder utilizes professional expertise, captured as a private signal, to make ex-post decisions on verifying audit failures. In contrast, PCAOB inspection is modeled as a Commitment Regime, where the stakeholder lacks private information but can commit ex-ante to a predetermined level of verification. We find that the Judgment Regime benefits from a resource-allocation effect and a deterrence effect driven by informed verification, whereas the Commitment Regime deters audit failures through the first-mover advantage of ex-ante commitment. Our analysis demonstrates that the stakeholder prefers the peer review system if and only if the private signal is sufficiently informative. Furthermore, comparative statics reveal that higher verification costs or stronger audit incentives shift the stakeholder's preference toward PCAOB inspection.
Innovation
Methods, ideas, or system contributions that make the work stand out.
Judgment Regime
Commitment Regime
Private Signal
Resource-allocation Effect
Deterrence Effect
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