• (i) If , after that auditor 2 carries auditing services regarding quality in order to website subscribers and you will from the a charge out-of . Auditor dos has the benefit of NAS so you’re able to buyer and you can prices for NAS. New associate establishes and sells NAS so you’re able to website subscribers and you will .
• (ii) If not, in the event that , up coming auditor dos offers auditing functions regarding quality to help you client in the a fee of . Auditor 2 even offers NAS so you’re able to visitors businesses and , and you will costs for NAS. The newest agent kits and deal NAS in order to consumer .

Targeting audit characteristics at only the fresh new higher-exposure visitors function getting high quality audits at the a high price

Keep in mind off Suggestion step 1 one auditor 2 faces a tradeoff ranging from selling auditing features in order to that visitors company at the a high price, and you will promoting auditing properties to help you one or two consumer firms in the a lower life expectancy speed. Versus NAS constraints, auditor 2 produces no rent about NAS sector, just like the auditor 2 partcipates in Bertrand competition towards the consultant. not, that have NAS limitations, this new associate try a good monopolist merchant from consulting qualities with the buyer providers audited by the auditor 2, and that charge an optimistic speed. Continue reading “This permits auditor dos to costs a confident price towards NAS it’s”