search query: @author Suh, Y. S. / total: 2
reference: 2 / 2
« previous | next »
| Author: | Suh, Y. S. |
| Title: | Communication and income smoothing through accounting method choice. |
| Journal: | Management Science
1990 : JUN, VOL. 36:6, p. 704-723 |
| Index terms: | ACCOUNTING SYSTEMS INFORMATION ECONOMICS AGENCIES DISCLOSURE |
| Language: | eng |
| Abstract: | It is shown how accounting income smoothing could arise as rational equilibrium behaviour. A two-period agency model is developed in which an agent obtains private information regarding future productivity of the operation. Direct communication of the agent's private signal yields a strict Pareto improvement over no-communication since it allows the agent to achieve signal-contingent interperiod consumption smoothing. Delegation of accounting method choice to the agent is shown to be an alternative mechanism to direct communication. |
« previous | next »
SCIMA