We study an extension of a two-period inventory management problem with positively correlated demands in which the manager's compensation is partially based on an external, market-based assessment of the firm's value. As typically the "real'' demand is only observed internally in the firm, the...

This paper analyzes the impact of signal-to-noise-ratios and the autocorrelation of a performance measure on the principal's welfare in dynamic agencies with renegotiation. We consider the impact of changes in the persistent, transitory, and reversible components of accounting earnings on its...

In the empirical estimation of the relation between CEO pay and both firm and peer performance, researchers typically include conventional accounting-based measures that reflect firm performance net of executive pay expense. We analytically show that when firms evaluate CEO performance relative...

Equity-based compensation causes increases in firms' share count and dilutes Earnings Per Share (EPS), which provides firms with an incentive to raise EPS using either share buybacks or earnings management. We employ a regression discontinuity framework to provide evidence of a causal link...

This article investigates the co-relationship of operating performance with implementation of ERP system in listed companies. The descriptive statistics reveals that the operating performance of ERP companies in 2003, that ROS, ROI, ROE and ROA regarded as companies' operating performance index...

Uncertainty is the core variable in any contingency theoretical framework (Chapman, 1997; Donaldson, 2001). Many reviews however have claimed that the accounting literature lacks a comprehensive framework for analysis of the relationship between uncertainty and MCS (Otley, 1980; Dent, 1990; Chapman, 1997;...

Corporate governance literature advances the idea that certain aspects of board of directors' structure improve monitoring of managerial decisions. Among these is the managers' decision to manage earnings. Prior studies have shown that earnings management, in widely-held public companies, is...

Early empirical studies find a negative association between firm performance and shareholder activism, whereas more recent studies document a positive association. We argue and theoretically show that this change in behavior results from mandating executive compensation disclosure. We develop a...

Our paper examines the association between components of analysts' earnings surprises and future earnings. We decompose the analysts' earnings surprise into its revenue, pretax margin, pretax income, and tax components. After controlling for current period earnings and discretionary accruals, we...

This paper investigates whether managers' presentation of special items within the financial statements reflects economic performance or opportunism. Specifically, we assess special items presented as a separate line item on the income statement (income statement presentation) to those...