Financial reporting, Reporting accuracy, Uncertainty, Precision

Financial reporting, Information asymmetry, Principle-agent model

Managerial accounting, Information asymmetry, Communication

This note demonstrates purely statistical conditions under which a monitor will be valuable in the presence of predecision asymmetric information and self‐reporting. This result is an extension of the information value results found for principal‐agent problems with symmetric information. Résumé. Cette note démontre les conditions statistiques pures sous lesquelles un moniteur sera valable en présence d'une information asymétrique préalable. Ce résultat est un prolongement des résultats de la valeur de l'information obtenus pour des problèmes de mandant‐mandataire avec une information symétrique.

Explores the use of accounting numbers in employee evaluation. Employee participation in accounting-based budgeting processes; Determination of employee participation; Links between accounting signals and performances expected to employees; Results of principal-agent analysis; Results of zero value to participation.

Presents a study which models the internal audit function as a scarce economic resource and the use of that resource for the provision of incentives. Background on the internal audit function; Internal auditing used for performance evaluation; Internal auditing not used for performance evaluation.

Mark Penno, John S. Watts, An Independent Auditor's Ex Post Criteria for the Disclosure of Information, Journal of Accounting Research, Vol. 29, Studies on Accounting Institutions in Markets and Organizations (1991), pp. 194-212

This paper examines the voluntary disclosure of nonproprietary information using the model of uncertain information endowment developed by Dye (1985) and Farrell (1986), and extended by Jung and Kwon (1988). The paper focuses on a broad family of functions relating the probability of information acquisition to ex post information quality. The paper shows that for each function there is some region that displays a negative relation between ex ante information quality and the frequency of disclosure. In addition, a sub-family of functions is identified for which ex ante information quality and the frequency of disclosure are negatively related everywhere. These results indicate that the economic intuition that higher informational asymmetry is accompanied by more voluntary disclosure is not generally true.

Looks at the effect of imperfect competition in audit markets on the demand for audit-related services. Switching costs; Effect on structure of audit engagement structure and client-auditor relationship; Audit pricing; Low-balling; Auditor switching.