We model the relationship between an entrepreneur's monitoring of a manager's performance and the entrepreneur's choice of the firm's financial disclosure policy. The environment is characterized by incomplete contracting and the presence of informed traders. We show that the entrepreneur may...

We examine the efficiency implications of a manager's financial reporting system choice and disclosure management. When a manager has some private information that is not captured by a firm's financial reporting system and may manipulate the financial report at some cost, we show that the...