Accounting Research Workshop with Negin Attar-Niggemann

Negin Attar-Niggemann was invited by the Institut für Unternehmensrechnung und Controlling at LMU Munich to present the project "Audit Regulation for Financially Constrained Firms", which is co-authored by Volker Laux and Felix P. Niggemann. By developing a model with limited internal funds and moral hazard constrain investment, they show that stricter audit standards can expand firms' capacity to raise external financing.

This research is especially relevant this present day, as it suggests that stricter audit standards are optimal during economic downturns, and also in less developed financial markets, where financing constraints are more severe. Additionally, as smaller firms are assumed to be more financially constrained, the model implies stricter rather than more lenient optimal audit standards.