New model proposed to enhance auditor independence and prevent financial fraud.
Auditors are important for keeping companies honest and helping investors trust them. But sometimes auditors might not be completely independent, which can make investors worried. Many ideas have been suggested to fix this problem, like making auditors wait longer before working for a company they audited before. The researchers suggest that auditors should be chosen by a majority of smaller investors, and that audit firms should be more transparent. They also think that public investors should have more say in the audit committee.