Independent Auditors as Fiscal Gatekeepers
Date
01.01.1997
01.01.1997
Authors
Luigi Alberto Franzoni
JEL Code
K42,H26
K42,H26
Keywords:
Law enforcement,Tax evasion,Auditing,Collateral liability,Certification
Law enforcement,Tax evasion,Auditing,Collateral liability,Certification
Publisher
Economy and Society
Economy and Society
Editor
Fausto Panunzi
Fausto Panunzi
This paper develops a framework for the analysis of gatekeeping in tax enforcement, whereby independent auditors are assigned the duty of certifying taxpayers’ reports. The equilibrium of the market for gatekeepers’ services is characterised, as well as taxpayers’ and auditors’ optimal behaviour. The paper discusses the optimal structure of the gatekeeping regime and determines the conditions under which it is socially preferable to direct public enforcement.