An experimental investigation of auditors' liability: Implications for social welfare and exploration of deviations from theoretical predictions

Accounting Review

Volumn 75, Issue 4, 2000, Pages 429-451

  King, Ronald R ^a   Schwartz, Rachel ^a  

^a NONE

Author keywords

Anticipation and best response; Audit quality; Damage measures; Experimental economics; Liability rules; Social welfare

Indexed keywords

EID: 0034348044     PISSN: 00014826     EISSN: None     Source Type: Journal    
DOI: 10.2308/accr.2000.75.4.429     Document Type: Article

References (18)

1. Ball, S., and P. Cech. 1996. Subject pool choice and treatment effects in economic laboratory research. Research in Experimental Economics 6: 239-292.
2. Bloomfield, R. 1997. Strategic dependence and the assessment of fraud risk: A laboratory study. The Accounting Review 72 (October): 517-538.
3. Camerer, C. 1997. Progress in behavioral game theory. Journal of Economic Perspectives 11 (4): 167-188.
4. Cave, G. 1985. Extensions of accountants' liability for negligence: One step closer to a new implied warranty of results. University of Colorado Law Review 56 (Winter): 265-287.
5. Dopuch, N., and R. King. 1992. Negligence versus strict liability regimes in auditing: An experimental investigation. The Accounting Review (January): 97-120.
6. -, D. Ingberman, and R. King. 1997. An experimental investigation of multi-defendant bargaining in "joint and several" and proportionate liability regimes. Journal of Accounting and Economics 23 (July): 189-221.
7. Edgington, E. 1980. Randomization Tests. 2nd edition. New York, NY: Marcell Dekker.
8. Kachelmeier, S. 1991. A laboratory market investigation of the demand for strategic auditing. Auditing: Journal of Practice & Theory 10: 25-48.
9. -, S. Limberg, and M. Schadewald. 1991. A laboratory market examination of the consumer price response to information about producers' costs and profits. The Accounting Review 66 (4): 694-717.
10. -. 1996a. Discussion of: Tax advice and reporting under uncertainty: Theory and experimental evidence. Contemporary Accounting Research 13 (1): 81-89.
11. -. 1996b. Do cosmetic reporting variations affect market behavior? A laboratory study of the accounting emphasis on unavoidable costs. Review of Accounting Studies 1 (2): 115-140.
12. Kahneman, D., and A. Tversky. 1979. Prospect theory: An analysis of decision under risk. Econometrica: 263-291.
13. -, J. Knetsch, and R. Thaler. 1986. Fairness and the assumptions of economics. Journal of Business 59: S285-S300.
14. King, R., and R. Schwartz. 1999. Legal penalties and audit quality: An experimental investigation. Contemporary Accounting Research: 685-710.
15. Schelling, T. 1960. The Strategy of Conflict. Boston, MA: Harvard University Press.
16. Schwartz, R. 1997. Legal regimes, audit quality, and investment. The Accounting Review 72 (July): 385-406.
17. Shavell, S. 1980. Strict liability versus negligence. The Journal of Legal Studies 9 (January): 1-25.
18. Smith, V. 1994. Economics in the laboratory. Journal of Economic Perspectives 3 (8): 113-131.