Effects of Increasing Enforcement on Financial Reporting Quality and Audit Quality
研究了加强公共执法对财务报告和审计质量的影响，发现执法与审计在弱执法下互补、强执法下可替代，且不同执法工具的效果取决于生产风险、会计系统特征和审计范围。
ABSTRACT A widely held assumption in policy making and empirical research is that increasing the strength of public enforcement improves financial reporting quality and audit quality. This paper provides a more nuanced view. In a model with a manager who can manage earnings, a strategic auditor, and an enforcement institution, we show that enforcement and auditing are complements in a weak enforcement regime but can be substitutes in a strong regime. Although stronger enforcement always mitigates earnings management, the effects of different instruments of strengthening enforcement are ambiguous. We show that they can improve or impair financial reporting quality and audit quality, depending on production risk, accounting system characteristics, and the scope of auditing relative to enforcement.