Auditing, Auditor independence, Agency model, Moral hazard

Auditing, Modelling, Economic agents

Information rents, Information systems, Resource allocation, Private information

Understanding the role of accounting in intrafirm resource allocation problems' requires understanding its substitutes. If accounting is viewed as information production arising in response to inefficiencies caused by information voids,2 then substitutes for accounting are alternative ways to reduce these inefficiencies. The purpose of this paper is to explore the power of commitment to reduce inefficiencies in a repeated intrafirm resource allocation problem. In this way, we hope to take a step toward understanding commitment as a substitute for accounting. We build a model with inefficiencies due to information voids by assuming an owner of an investment project, who knows only a distri-

Relative performance evaluation, Firm performance, Peer group evaluation, Corporate executives

Executive compensation, Contracting, Stock options

This paper examines the information content of revenue recognition rules in a series of environments, ranging from an abstract disclosure setting to one of disclosure in the presence of moral hazard and self‐reporting by an informed agent. The emphasis is on conceptualization of recognition issues, ranging across financial and labor markets, and the simplification required to force the analysis into a workable and familiar model. In this way, the limitations of both our thinking about recognition issues and our modeling techniques are highlighted. Résumé. Les auteurs examinent le contenu informationnel des règies de constatation des produits dans un éventail de cas, parmi lesquels un cas abstrait de publication d'information, un cas de présentation d'information en situation de risque moral, en passant par la présentation autonome d'information par un mandataire averti. Les auteurs s'intéressent particulièrement à la conceptualisation de questions relatives à la constatation des produits couvrant le marché financier et le marché du travail, et à la simplification qu'il faut opérer pour ramener l'analyse à la dimension d'un modèle maniable et d'utilisation courante. Ainsi les limites que component tant l'opinion au sujet des questions de constatation des produits que les techniques de modélisation sont‐elles mises en relief.

Auditing, Management Advisory Services, Contracting, Economies of scope

[The purpose of this paper is to examine controllability: the notion a manager should be evaluated based on that which she or he controls. We embed the managerial evaluation problem in a principal-agent setting and ask whether the optimal agency solution bears any logical relation to a casual definition of controllability. It does not. More to the point, the agency framework compels us to look at information content. This information content perspective, upon reflection, agrees with our intuition, with our anecdotal impressions of practice, and with the dictates of the principal-agent model. Moreover, there is a well-defined relation between information content and a notion of control. Thus, the information content perspective may be thought of as offering a precise definition of controllability.]