The best analysis of audit policy under the different rational structures

• Main Authors: Zong-po Lin, 林宗波
• Other Authors: Ruei-ji Guo
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/05564692716987213764

碩士 === 東吳大學 === 會計學系 === 94 === Information asymmetry has been a popular phenomenon under the variety of social structure. Traditionally, we assume that the agent who faces the uncertain risk will calculate his profits and losses rationally. According to some empirical findings and experiments, however, it can be found that people may deviate the rational expectations hypothesis with some reasons. As a result, this paper intends to establish a model to analyze optimal auditing policy with a view to maximizing the principal’s profits under the assumption that the agent facing uncertain risks can be either rational or irrational. The result shows that the higher is the audit cost, the lower is the probability for the principal to the agent. Moreover, according to the sensitive analysis, if the proportion of absolute dishonest agents increases, the principal’s expected profits will be less and then the auditing probability should be added to safeguard the principal’s profits. In some situations, however, there are still some exceptions from the above results.