This paper considers the information systems induced by auditing policies in a principal-agent model with moral hazard. We point out that two such information systems A and B are seldom comparable using the customary mean-preserving spread relation between their respective likelihood ratio...

This paper considers the information systems induced by auditing policies in a principal- agent model with moral hazard. We point out that two such information systems A and B are seldom comparable using the customary mean-preserving spread relation between their respective likelihood ratio...

We first point out that, using any of the current criteria for comparing information systems in principal-agent models with moral hazard (such as Kim (1994)'s criterion), it is often impossible to contrast the value of information obtained from different policies of contingent audits that bear...

This paper seeks to provide a ranking of information systems in a setting of contingent monitoring. Control strategies that make the acquisition of additional information conditional on observing certain outcomes largely elude the existing ranking criteria. We show that this happens because...