Purpose – The purpose of this paper is to assess whether ownership concentration, leverage and demand for equity financing is associated with internal corporate governance quality. The paper focuses on dimensions of governance quality that are related to financial reporting quality....

In this paper, we consider a one shot principal agent problem. The owner of the firm (principal) hires a manager (agent). As firm value is non‐contractible by assumption, an incentive contract is written on accounting income. The manager performs some productive task that increases firm value...