Details

Autor(en) / Beteiligte

• COOK, J
• HATHERLY, D
• NADEAU, L
• THOMAS, L. C

Titel

Does cooperation in auditing matter ? A comparison of a non-cooperative and a cooperative game model of auditing

Ist Teil von

• European journal of operational research, 1997-12, Vol.103 (3), p.470-482

Ort / Verlag

Amsterdam: Elsevier

Erscheinungsjahr

1997

Quelle

Elsevier ScienceDirect Journals

Beschreibungen/Notizen

• A game model of auditing including internal control investigation and substantive testing is analyzed as a non-cooperative game. It is shown that in order for the presumed socially desirable outcome of high and honest effort by all to be obtained, it is necessary to adjust the cost structure to ameliorate the costs of not-qualifying erroneous accounts if the auditor can prove she had worked hard. Comparison with a cooperative game analysis of the model shows that there is a region of parameters where both cooperative and non-cooperative versions of the game lead to this socially desirable outcome. The significance of this result is that whilst society expects an independent auditor not to cooperate with the auditee, the practical realities of auditing require a considerable degree of cooperation. This leads to an expectations gap between what society expects and what actually happens, except in those cost regions where both the cooperative and non-cooperative versions of the audit game lead to the same solution.