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AN EMPIRICAL STUDY OF EXTERNAL AUDITOR RELIANCE ON INTERNAL AUDITORS In the imperfectly sorted markets displayed in Panels D and F, however, the magnification effect is smaller: θ * = in D and in F. The simulations below suggest that this tendency for effectiveness sorting and magnification to depend on the number of districts when parents care about both peer group and effectiveness holds generally, as long as concern for peer group (δ ) is moderate. When δ is large, however, even markets with many districts can have unsorted equilibria, and there is no tendency for E[θ *|δ , J] to increase with J,. | AN EMPIRICAL STUDY OF EXTERNAL AUDITOR RELIANCE ON INTERNAL AUDITORS by Loren L. Margheim A Dissertation Presented in Partial Fulfillment of the Requirements for the Degree. Doctor of Business Administration ARIZONA STATE UNIVERSITY May 1984 1984 LOREN L MARGHEIM All Rights Reserved AN EMPIRICAL STUDY OF EXTERNAL AUDITOR RELIANCE ON INTERNAL AUDITORS by Loren L. Margheim has been approved February 1984 APPROVED Supervisory Committee ACCEPTED Dean of the c 0 4 6 Dean .Graduate c .

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