The Legal Environment and Its Impact on Valuation

1990 ◽  
Vol 1990 (2) ◽  
pp. 4-12
Author(s):  
Robert P. Oliver
Keyword(s):  
Legal Environment

Audit Market Concentration, Audit Fees, and Audit Quality: Evidence from China

2015 ◽  
Vol 35 (2) ◽  
pp. 121-145 ◽  
Author(s):  
Ting-Chiao Huang ◽  
Hsihui Chang ◽  
Jeng-Ren Chiou
Keyword(s):  
Indirect Effect ◽  
Audit Quality ◽  
Earnings Quality ◽  
Audit Fees ◽  
Developed Countries ◽  
Market Concentration ◽  
Legal Environment ◽  
Positive Relation ◽  
Audit Market ◽  
Lower Likelihood

SUMMARY We investigate the effects of audit market concentration on audit fees and audit quality in China, where competition is intense and the legal environment is relatively weak compared with developed countries. Analyzing 12,334 firm-year observations for the period 2001 to 2011, we find a significant positive relation between concentration and audit fees. Path analysis shows that concentration improves client earnings quality and reduces the need for auditors to issue modified audit opinions through increased audit fees. Additional analysis indicates that the increased audit fees and client earnings quality resulting from increased concentration are associated with a lower likelihood of executives and auditors being sanctioned by regulators for audit failures. Together, our results suggest that concentration improves audit quality indirectly through increased audit fees and this positive indirect effect offsets the negative direct effect of concentration on audit quality. By separating the direct and the indirect effect of concentration on audit quality, our study would explain why previous studies that do not have a separation document mixed evidence. Our findings inform regulators that actions taken to eliminate the indirect effect of concentration, for example restricting the upper bound of audit fees, could produce unintended outcomes such as decreased audit quality.

scholarly journals Tackling Illegal Activities Through Tax Law – Al Capone Case Study

2015 ◽  
Vol 6 (1) ◽  
pp. 47-56
Author(s):  
Matej Kacaljak
Keyword(s):  
Criminal Law ◽  
Tax Evasion ◽  
Slovak Republic ◽  
Basic Structure ◽  
Tax Law ◽  
Legal Environment ◽  
Legal Institutions ◽  
The Usa ◽  
Illegal Activities

Abstract This paper discusses the Al Capone case and identifies legal institutions which contributed to the conviction of Al Capone for tax evasion in the USA and discusses similarities in Slovak law. The Slovak legal environment is assessed with the aim of identifying potential room for improvement. Under an assumption of identical factual circumstances, it is tested whether Al Capone would be convicted of tax evasion in the Slovak Republic and if not, what would be the main reasons. The paper concludes that due to some, probably unintentional, specifics of Slovak tax and criminal law, Al Capone could not be convicted of tax evasion by the Slovak courts. In our opinion, these specifics do not, however, constitute material elements of the basic structure of Slovak tax and criminal law and could be relatively easily corrected.

Changes in the legal environment and enforcement of firearm transfer laws in Pennsylvania and Maryland

2018 ◽  
Vol 25 (Suppl 1) ◽  
pp. i2-i4 ◽  
Author(s):  
Cassandra K Crifasi ◽  
Molly Merrill-Francis ◽  
Daniel W Webster ◽  
Garen J Wintemute ◽  
Jon S Vernick
Keyword(s):  
Court Decision ◽  
Annual Number ◽  
Legal Environment ◽  
Background Check ◽  
The Mean ◽  
Definition Of

The effectiveness of laws depends on circumstances affecting their enforcement. To assess such circumstances for comprehensive background check (CBC) and straw purchase laws for firearm sales, we examined prosecutions for CBC and straw purchase violations in Pennsylvania and CBC violations in Maryland. We generated pre-post variables and conducted t-tests to assess differences in the mean number of prosecutions filed following changes to the legal environments. The annual number of prosecutions for straw purchase violations increased significantly in Pennsylvania following the passage of a law that strengthened penalties for these violations (difference in means = +1310.86, P=0.003). The annual number of prosecutions for CBC violations decreased significantly in Maryland following a court decision that narrowed the definition of a firearm transfer making enforcement more difficult (difference in means = −20.52, P=0.026). Our findings suggest enforcement is likely influenced by the penalties associated with violating these laws and the interpretation of the language of the laws.

Legal Environment and Contractual Choice

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Ho Cheung Cheng
Keyword(s):  
Optimal Contract ◽  
Legal Environment ◽  
Gains From Trade ◽  
Legal Systems ◽  
Ex Post ◽  
Ex Ante ◽  
Contractual Choice

Abstract This paper considers contractual choice under imperfect legal systems, in particular, contracts with different timing of payment. Ex-ante payment contracts are risky for the buyer, because the seller may shirk. Ex-post payment contracts are risky for the seller, as the buyer may default. Optimal contract is solved for any given legal environment. Exchanges with lower gains from trade tend to adopt ex-post payment contracts. The seller is a better proposer than the buyer in terms of the efficiency of the proposed contract. Surprisingly, offering ex-ante payment contracts is not strictly better for the seller under any legal environment. Moreover, mixed payment contracts are also analyzed and shown to never be optimal.

Sign in / Sign up

Export Citation Format

Share Document