276 the accounting review april 2002 h2 po auditors

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: mal (PO) alternative predicts that auditors are trusting (as discussed in the SSB alternative) and that managers reciprocate the trust, raising the payoffs for both players. The null and the alternatives are stated below. H2 (Nash): The frequency of Nash audits will be the same in the NP and YP settings. H2 (SSB): Auditors select the trust audit more frequently in the YP settings than in the NP settings and managers do not reciprocate by lowering the fraud level to match the lower audit level (thus leading to a self-serving bias on auditors’ part). 276 The Accounting Review, April 2002 H2 (PO): Auditors select the trust audit more frequently in the YP settings than in the NP settings and managers reciprocate by lowering the fraud level to match the lower audit level (thus leading to a Pareto improvement over Nash). H3: WG Settings Compared to SG Settings The economic incentives are the same across the SG and WG settings. Thus, if auditors are not affected by the psychological influences of the SG treatment, t...
View Full Document

This note was uploaded on 01/27/2014 for the course ACCY 405 taught by Professor Staff during the Fall '08 term at University of Illinois, Urbana Champaign.

Ask a homework question - tutors are online