To protect investors, regulators increasingly rely on regulating firms' internal controls over financial reporting, but they punish noncompliance only if an internal control weakness enabled accounting manipulation. In other words, enforcement is manipulation-contingent. We develop an economic...

This paper surveys both the theoretical and the empirical archival literature on conservatism when accounting information is used for debt contracting. The theoretical literature shows mixed results whether conservative accounting is desirable, which depends on the underlying agency problem, the...

This paper shows a strict demand for a suitably chosen inaccurate overhead cost allocations in an agency model in which a profit center manager is in charge for production cost containment and pricing decisions. Given exogenous restrictions on the compensation scheme, the use of distorted...

This paper provides a theoretical foundation for findings in empirical studies that document a positive association between conservatism and strong corporate governance through the board's monitoring efficiency. We construct a model with a board that decides whether to replace the incumbent...

A premise of standard setters and of much empirical research is that improving the quality of accounting standards and their implementation increases information in capital markets. This paper challenges this premise and shows that there are situations in which “better”, i.e., more...

Empirical studies on earnings quality use various measures that capture particular dimensions of earnings quality. This paper provides a theoretical foundation to evaluate and compare several common earnings quality measures: value relevance, persistence, predictability, smoothness, and...

Einführung und institutionelle Grundlagen -- Informationsfunktion -- Rechnungslegung und Kapitalmarkt -- Bilanzierungs- und Bewertungsgrundsätze -- Ausschüttungsbemessung -- Bilanzpolitik -- Publizität -- Wirtschaftsprüfung -- Prüferhaftung und Prüfungspolitik -- Unabhängigkeit des Prüfers.