Accounting Conservatism and Managerial Incentives

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Young K. Kwon;
  • Journal: Management Science, volume 51, issue 11 November, pages 1,626-1,632
  • Identifiers: doi: 10.1287/mnsc.1050.0417
  • Subject: accounting conservatism, moral hazard, limited liability, agency costs

There are two sources of agency costs under moral hazard: (1) distortions in incentive contracts and (2) implementation of suboptimal decisions. In the accounting literature, the relation between conservative accounting and agency costs of type (1) has received consider... View more
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