Journal of Accounting and Economics Vol. 9 No. 3 1987
The derived demand for consolidated financial reporting
open access
Abstract
During the latter half of the 1930s Australian taxation law changes induced companies to adopt a holding company legal structure which increased agency costs associated with external financing. This paper argues that contracting practices designed to minimize these costs played an important part in the evolution of consolidated financial reporting. Consistent with this view the likelihood of consolidation is found to be a function of the presence of cross-guarantees, management's share of a firm's equity, and the number and type of subsidiaries.
- DOI
- 10.1016/0165-4101(87)90008-5
- Volume
- 9
- Issue
- 3
- Pages
- 259-285
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref