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The Collusion Deterrence with Prisoner’s Dilemma

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DOI: 10.4236/jssm.2010.34053    8,180 Downloads   12,545 Views  


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.

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The authors declare no conflicts of interest.

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.


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