At present, accounting textbooks miss a quick calculation of the present value of an annuity with variable payments. The current approach is to calculate the present value of each payment separately. In this paper, we present different ways to calculate the present value of such an annuity when...

Consider the following puzzle: If earnings management is harmful to shareholders, why don't they design contracts that induce managers to reveal the truth? To answer this question, we model the shareholders-manager relationship as a principal-agent game in which the agent (the manager) alone...

There is a growing analytical body of research on artificial smoothing - the manipulation of accounting numbers through accounting cosmetics. However, firms also can manipulate earnings through production-investment decisions real smoothing; the latter topic received little attention. In this...

This study analyzes tax evasion as the outcome of the internal organization of the tax bureau - namely, the design of the employees? incentives and work flow. We compare two quot;extremequot; alternatives: the tax bureau as a system of stochastic, costly, in-depth audits and zero incentives for...

Consider the following puzzle: If earnings management is harmful to shareholders, whydon't they design contracts that induce managers to reveal the truth? To answer this question, we model the shareholders-manager relationship as a principal-agent game in which the agent (the manager) alone...

Valuation requires the prediction of future growth rate of persistent earnings, whichdepend on past and present internal, unobservable, investment decisions. In this study, we investigate the acirc;not;Smanagementacirc;not;? of the series of growth rates in a multi-period principal-agent model...

A firm meets or beats expectations when it reports earnings that are at or above the consensus analysts' forecast. We argue that two types of firms MBE: strong firms who commit to future performance and signal future earnings by MBE, and weak firms who attempt to mimic strong firms by managing...