Purpose: The expectations surrounding innovation as the principal mean by which firms gain a sustainable advantage while simultaneously alleviating social problems are tremendous. However, in the process of developing innovation, many small entrepreneurs, SMEs, as well as large firms struggle...

We report experimental results for a simple bimatrix game between a manager and an auditor. We investigate whether the quality of audited financial statements improves if the relative proportion of perfectly honest auditors increases. We find that the quality of audited reports is higher if...

We use Benford's Law to provide evidence that German firms round up both their net income and earnings per share. We use the introduction of the euro to show that round earnings numbers are likely the result of earnings management. The incentive to round up comes from stakeholders’ left-digit...