The auditors choices appear in the rows denoted as

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Unformatted text preview: anager’s choices appear in the columns, with the three fraud levels denoted as cooperate (lowest level of fraud), Nash (middle level of fraud), and cheat (highest level of fraud). The auditor’s choices appear in the rows, denoted as trust (lowest audit; with the TABLE 1 Payoff Matrix Used in the Experimenta Manager’s Fraud Level Manager Selects the Cooperate Fraud Level Auditor Selects the Trust Audit Level Auditor Selects the Nash Audit Level Auditor Selects the Defensive Audit Level a Manager’s payoffs Expected payoff Fraud detected (payoff; probability) Fraud not detected (payoff; probability) Auditor’s payoffs Expected payoff No penalty (payoff; probability) Penalty (payoff; probability) Manager’s payoffs Expected payoff Fraud detected (payoff; probability) Fraud not detected (payoff; probability) Auditor’s payoffs Expected payoff No penalty (payoff; probability) Penalty (payoff; probability) Manager’s payoffs Expected payoff Fraud detected (payoff; probability) Fraud not detected (p...
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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.

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