In this paper, we depict and analyze simple models of moral hazard, namely “operating moral hazard” and “investing moral hazard.” First we assume that a corporation exists primarily for the benefit of their shareholders. Then, moral hazard occurs when managers choose an option knowingly...

Over a career extending back to the late 1930s Professor William W. Cooper has published books and articles in the field of accounting, mathematics, operations research, management science, engineering, economics, public policy and the behavioural sciences, reflecting wide interdisciplinary...

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...

In this paper, we study information asymmetries about verifiability between a principal and an agent. Our main result is that an information asymmetry about verifiability not only reduces the usefulness of a given performance measure for stewardship purposes, it can completely destroy that...

This paper explores quot;revenue accountingquot; in contrast to traditional quot;cost accounting.quot; Revenue accounting is to serve information needs of managers and investors in planning and controlling a firm's sales activities and their financial consequences, especially in the E-Commerce...