headquarters maximize total expected firm returns by providing managers incentives based on firm equity and divisional profits. The … costly to provide, managers with larger spillovers should receive higher equity incentives. The return-maximizing incentives … also encourage greater cooperation from managers with riskier divisional performance and have useful implications for …

auditors respond to the increased competition from the HQ auditor. Theory predicts that managers will demand high levels of … auditors lowering audit quality. Our additional analyses indicate that some managers demand lower audit quality in an attempt …

rational managers engage in misreporting, in spite of the costly consequences. We present a simple extension to the Fischer and … in the reputation costs observed after a restatement, such that managers only reduce future bias if the observed cost of … based on more restatements. Our results indicate that rational managers use the insights from prior restatements to improve …