We analyze the optimal behavior of an organization when its employees can manipulate the organization's accounting system to their private advantage. We find that the organization may benefit by helping its employees manipulate the system. This help can reduce the employees' private returns from...

GAAP mandates a variety of departures from historical cost valuation. We consider a simple model that produces corresponding variety, depending on prevailing regulatory objectives and economic conditions. The model entails entrepreneurial investment in an asset followed by private information...

We report on a panel discussion at the 2001 CMU Accounting Mini-conference under the title "Intellectual Foundations of Accounting." We provide a background and the motivation for the discussion and present the remarks by the four panelists. A number of perspectives are taken. Sunder emphasizes...

This paper addresses the issues that confront the FASB and IASB in developing a new conceptual framework document. First, we suggest characteristics that a conceptual framework ought to exhibit. Most of these suggestions are based on our critique of the existing framework and the FASB-IASB work...

The American Accounting Association's Financial Accounting Standards Committee is pleased to have an opportunity to express its views on the FASB's Call for Preliminary Views on its Conceptual Framework. We applaud the decision of the FASB to develop a Conceptual Framework and seek comments on...

We analyze a principal-agent setting with multiple sources of contracting information in which the signal from each source can be unmistakably interpreted as "good" or "bad" news. We then ask whether it is best to condition the acquisition of one of the information sources on whether the earlier...

We report on a panel discussion at the 2001 CMU Accounting Mini-conference under the title "Intellectual Foundations of Accounting." We provide a background and the motivation for the discussion and present the remarks by the four panelists. A number of perspectives are taken. Sunder emphasizes...

Firm organization determines how coworkers communicate and how information flows within the firm. Banking, accounting, consulting, and legal firms process proprietary information which their clients wish to protect. The firm's ability to safeguard and manage information determines its market...