We study how biases in financial reporting affect managers' incentives to develop innovative projects and to make appropriate investment decisions. Conservative reporting practices impose stricter verification standards for recognizing good news, and reduce the chance that risky innovations will...

This first chapter develops an economic model of the firm linking current financial and non-financial measures to future earnings for retail banks. The data support the associations among current financial and non-financial measures predicted by model, suggesting that the economic model is...

"Accounting influences our lives. Whether or not one uses accounting information, accounting alters our social, economic and physical environment. And of course, it impacts organisations and altering what we do and the decisions we make. Corporate action regarding new product developments,...