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Unformatted text preview: talk and the seriousness of the omitted disclosures and discounts the price accordingly. The seller benefits from an audit. Why? Information Asymmetry: Dealing with Risk b. Describe how you are able to reduce the risks associated with information asymmetry under each condition. Provide numerous applications of agency theory within the auditing environment. How does the concept of rational expectations play a role in agency theory? Suppose no conflict of interest existed or information was symmetric (i.e., continuous monitoring is costless)?...
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- Fall '08
- Information asymmetry, usedcar, negative disclosures