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    Demand for auditing in a free market society

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    What are the factors that drive the demand for auditing in a free market society? Would there still be a demand for auditing even if the law did not require it? Why or why not?

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    There is a demand for auditing in a free-market economy because the agency relationship between an (absentee) owner and a manager produces a natural conflict of interest due to the information asymmetry that exists between the owner and manager.

    That is, the manager generally has ...

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    The expert examines the demand for auditing in a free market society.