This study examines whether accruals models' performance, in terms of predictive accuracy and power to detect earnings management, varies across strongly heterogeneous samples, such as different countries. We analyze the performance of two accruals estimation models, i.e., the Modified Jones...

We study the market for independent directors within a demand-supply framework. Consistent with prior research, we first show that, despite the unambiguous increase in the demand for independent directors since 2000 because of new governance reforms, independent directors have reduced their...

In this paper, we address the question whether performance measures that are specified in annual bonus contracts represent overall performance dimensions used by boards of directors in making governance decisions. Recent studies claim that managerial incentives are predominantly provided by...

This paper empirically tests the principal-agent model prediction that the use of performance measures for incentive purposes is affected by the agent's risk aversion. We identify proxies for managerial risk aversion that can be measured using publicly available executive compensation data and...

A current issue of potential concern in theory-based management accounting research is the extent to which endogeneity limits the validity of empirical testing of models. This paper aims to stimulate debate as to the meaning of endogeneity as it applies to (management) accounting research. The...

In this paper, I extend the organizational design literature by examining how the delegation choice is affected by the ability to resolve the incentive problem caused by this delegation. Based on the seminal papers by Grossman and Hart (1986) and Holmstrom and Milgrom (1994), I argue that the...

Organizations often respond to institutional pressures by symbolically adopting policies and procedures but decoupling them from actual practice. Literature has examined why organizations decouple from regulatory pressures. In this study, we argue that decoupling occurs within regulatory...

Two critical aspects of the model of auditor expertise development in Tan and Libby [1997] are that audit firms do not value tacit knowledge in inexperienced auditors but do value it in experienced auditors. We update the former and extend the latter. Our paper predicts and finds that audit...

In this study we examine whether increasing targets based on past performance information or on exogenous information affects employees' trade-off between short-term output and long-term investments differently. Both mechanism are supposed to increase long-term investments, while also achieving...

This study investigates the effects of attraction, retention, and incentive objectives on business unit pay strategy. Economic and psychological theories argue that differences in compensation objectives should lead to variations in organizations' pay strategies, including decisions regarding...