The Economics of Auditing: Foundations and Unanswered Questions (Routledge New Works in Accounting History)

The financial information provided to governments, creditors, investors etc. by businesses has been verified by auditors since ancient times.In its modern form, the independent public accounting profession has its roots in 19th century Scotland.A distinctive feature of this profession is that it consists of private for-profit businesses - operating as sole practitioners, partnerships, but mostly as large accounting firms.The question naturally arises - why should users of financial information provided by private for-profit firms place trust in the verification of that information by other private for-profit firms?This is the interesting and complex economic issue that underlies research in what has come to be called ‘the economics of auditing’.The author is one of the first researchers in this area.This book traces the development of this important stream of research that applies economic analysis to the study of financial statement audits by professional public accounting firms.It of