A growing literature suggests that accounting standards not only affect public information but also improve the information environment within a firm, leading to operational changes. In this paper, we examine one mechanism for the informational improvements brought by accounting standards. We present a model that demonstrates myopic incentives driven by short-term price pressure can endogenously lead to underinvestment in information. However, imposing an accounting standard that mandates a minimum level of information quality increases acquisition of decision-relevant information for activities the standard targets and untargeted but related activities. The resulting improvements in reporting quality accentuate investors’ reliance on the accounting report, which incentivizes the manager to put forth more effort. Collectively, the improvements in information quality and increase in effort improve the firm’s subsequent profitability. Using archival data in the context of the revenue recognition standard (ASC 606), we find evidence consistent with the primary conclusions of the modeled environment.