A Theory of Assurance: Balancing Costly Formal Control with Tone at the Top
用数学模型分析高层基调（TATT）如何与正式控制相互作用，发现两者在特定条件下既可能是互补品也可能是替代品，并解释了为何高TATT可能不被外部审计师或某些利益相关者欢迎。
Informal tone at the top (TATT) is widely regarded as a fundamental ingredient of organizational control, yet because of its soft nature, the scholarship on TATT has not emphasized mathematical modeling. Observing that TATT refers to the example set by top management, I model TATT as, ceteris paribus, reflecting the expectation that the chief executive officer (CEO) will not divert organizational resources for personal benefit. The setting assumes that CEOs are randomly drawn from a labor pool containing candidates who either value career prospects (high type) or who do not value career prospects (low type). The fear of dismissal and a damaged career mean that high types tend to be less opportunistic than low types, who divert for personal gain. Contrary to the belief that trust and vulnerability go hand in hand, I identify conditions where TATT and optimal costly formal controls are complements. But I also show in the same setting that TATT and optimal formal controls can be substitutes. The results also explain why high levels of TATT may not be welcomed by the external auditor or certain stakeholders and explain ambiguous Sarbanes-Oxley reports. This paper was accepted by Suraj Srinivasan, accounting.