The discussion on value-based performance measures is centered around the concept of residual income. The main property of residual income is its connection to capital budgeting and the net-present-value-rule. This property is, however, not sufficient to guarantee strong goal congruence between...

Empirical studies report a gap between theoretical concepts of management accounting and the actual practice in organizations. Specifically, there is a virtual absence of literature on the individual factors that drive or hinder the adoption of sophisticated management accounting concepts. In...

We consider a single-principal/multi-agent model to investigate the principal's preferences over delegated contracting. The analysis extends the single-agent/multi-task LEN model in Feltham and Xie (1994) to a multi-agent/multi-task context. We consider full-commitment contracts, i.e., the...

In theory, different valuation methods, with consistent assumptions, must give identical results. Numerical examples that purport to illustrate the theory should demonstrate the identical results. Unfortunately, in popular textbooks it is all too easy to find numerical examples that are at odds...

We provide a discussion of Hannan, Rankin and Towry (HRT) (2006) The effect of information systems on honesty in managerial reporting: A behavioral perspective. Some agency theorists have suggested that while individuals have some preference for honesty, their honesty threshold is so low that...

Nonprofit organizations are taxed on the portion of their income that is unrelated to their primary exempt mission. Prior research suggests that nonprofits reallocate expenses from their tax-exempt to their taxable activities in order to reduce their tax liabilities. This paper examines two...

EVA is a performance measure that is being used by an increasing number of companies, but academic research on EVA is limited. In addition, all prior empirical academic studies on EVA have used the firm as the unit of analysis. In this study, we examine the effect of EVA on the performance of...

We analytically model a setting in which two product centers share a manufacturing process, the issue being to assign the shared costs in a way that induces rational product center managers to truthfully report private information needed for an ex-ante best investment decision. The shared...

This paper analyzes the impact of capacity costs on bidding strategies of firms participating in procurement auctions. More efficient firms will invest in advance due to their high probability of winning the auction while less efficient bidders prefer to wait with their investments until the...

The New Zealand (NZ) Government began its public sector reforms in 1984. The purposes of the reforms were to build a more open public sector, a plainer and clearer way of reporting, emphasising accountability and transparency (Wallace, 1993). A central focus of the reforms was to change the...