This study explores how the determinants of financial, nonfinancial and behavioural controls vary in foreign subsidiary manager performance evaluations. Possible impacts of the following factors are analyzed: extent of geographical dispersion, decentralization and perceived environmental...

The balanced scorecard has been hailed as one of the major developments in management accounting in the last decade. Lipe and Salterio (2000) show that one of the key features of this development, the inclusion of measures that are unique to the strategic objectives of a business unit, tend to...

Accounting involves assigning numbers to events-quantifying them. Conventional wisdom holds that putting numbers to an argument enhances its persuasive power. However, little scholarly evidence exists to support or refute this claim, in accounting or elsewhere. In this paper, we develop an...

Avoiding continued investment in poorly performing projects is an important function of management control systems. However, prior research suggests that managers fail to use accounting information indicating that a project is performing poorly to discontinue it; that is, they escalate...

This study examines the behavioral impact of an information system, and how that impact varies with the information system's precision, in an internal reporting environment. In order to examine behavioral effects, we do not permit the owner to contract on the system's output. We propose that a...

We posit that the value of a manager's human capital depends on the firm's business strategy. The resulting interaction between business strategy and managerial incentives affects the organization of business activities, both the internal organization of the firm and the determination of firm...

I study the consequences of a random exposure to common risk for the purpose of relative performance evaluation (RPE) and find that it significantly affects the usefulness and the empirical measurement of RPE. According to my analysis, the magnitude of the exposure risk not only determines how...

In the empirical estimation of the relation between CEO pay and both firm and peer performance, researchers typically include conventional accounting-based measures that reflect firm performance net of executive pay expense. We analytically show that when firms evaluate CEO performance relative...

Prior research establishes that boards of directors can encourage risk-averse managers to take risky actions by providing stock options and severance pay. We demonstrate that the ability of these incentives to encourage risk-taking hinges on the level of uncertainty facing the manager, and that...

This paper shows that in a model of managerial delegation in duopoly market structure, if the managers' salary varies with the incentive schemes offered by the owners, then the well-known results of equilibrium incentive scheme (by Fershtman and Judd, 1987, A.E.R.) get modified. In case of...