Back to Search
Start Over
Accounting Policies in Agencies with Moral Hazard and Renegotiation.
- Source :
- Journal of Accounting Research (Wiley-Blackwell); Sep2002, Vol. 40 Issue 4, p1071-1090, 20p, 1 Diagram
- Publication Year :
- 2002
-
Abstract
- We emphasize the role of accounting policies, and their audit, in an earnings management setting. We use a two-period agency in which three frictions interact: the agent privately observes action (or effort) supply and output, and the initial contract is subject to renegotiation. This creates a setting in which both players' behavior is of concern, and, importantly, information rationing is efficient. Moreover, this information rationing is directly interpretable as being produced by an accounting policy whose application is ensured by an auditor. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00218456
- Volume :
- 40
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Journal of Accounting Research (Wiley-Blackwell)
- Publication Type :
- Academic Journal
- Accession number :
- 7351732
- Full Text :
- https://doi.org/10.1111/1475-679x.00082