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I tried to present a new method to prevent collusion through employing two auditors at the same time and inspiring them provide true report by exploiting their prisoner’s dilemma. But I found this method cannot be put into practice because of the high cost. So I analyzed whether sending the second auditor in a probability, a low cost method, can deter the audit collusion. I find sending the second auditor in a probability, enforcing the rigidly lawful punishment and perfecting the reward mechanism can prevent audit collusion. I also find the auditor’s ethical constraint do good to prevent collusion and the charger of state assets management can play the same role as the real owner of the state-owned enterprise in deterring collusion. This finding provides theory support for the government to implement the publicly audit bidding and random double auditing system on state-owned enterprise. The supervision of PCAOB on auditors is also the operation of this theory.


Audit Collusion, Prisoner’s Dilemma, Double Auditing, Ethical Constraint

Cite this paper

A. Liu and J. Liu -The Collusion Deterrence with Prisoner’s Dilemma,- Journal of Service Science and Management, Vol. 3 No. 4, 2010, pp. 470-478. doi: 10.4236-jssm.2010.34053.

Autor: Aidong Liu, Jinfang Liu



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