Political economy of finance
What Role Should Auditors Play in Corporate Compliance?
The Public Companies Accounting Oversight Board has proposed an amendment to its auditing standards that requires auditors to assume a larger role in corporate compliance. Roy Shapira and Luigi Zingales suggest a simple modification that addresses auditors’ concerns while improving the effectiveness of corporate compliance.
Tax Audits Deter Tax Avoidance But Not Without Costs to Firm Performance and Local Economies
In new research, Ga-Young Choi and Alex Kim show that tax audits work to deter firm tax avoidance, but with unintended costs for investment and employment for the firm and the broader economy.
Mandatory Audits Do Not Provide the Protection Governments Think They Do
In new research, Matthias Breuer, Anthony Le, and Felix Vetter find that when companies are required by the government to seek a third-party financial audit, they turn to lower quality auditors. Â As a result, the accounting industry grows, but touted benefits for markets and corporate stakeholders appear elusive.
Why Have Uninsured Depositors Become De Facto Insured?
Due to a change in how the FDIC resolves failed banks, uninsured deposits have become de facto insured. Not only is this dangerous for risk in the banking system, it is not what Congress intends the FDIC to do, writes Michael Ohlrogge.
The Macroeconomic Implications of Falling Real Estate Prices
In this second article on real estate in the current high-interest-rate environment, Joseph L. Pagliari Jr. explores banks’ exposure to commercial real estate, who might help fill the credit void as bank funding dries up, how the work-from-home phenomenon impacts commercial real estate prices, particularly the office sector, and what risks large urban centers face with emptied office buildings.
Evaluating Concerns of Collapsing Commercial Real Estate Prices
There are concerns among bankers and economists that commercial real estate prices are at risk of decreasing substantially. Joseph L. Pagliari, Jr. explains how commercial real estate should be priced based on current and projected inflation and interest rates. A subsequent article will explore if concerns about bank and broader economic vulnerabilities to lower CRE prices.
Call for Papers: Should Corporations Have a Social Purpose?
The Stigler Center is launching its fourth Political Economy of Finance conference and seeking papers on topics related to corporate social responsibility, the purpose...
