Financial accounting shall enable effective monitoring and control but can itself be subject to self-serving behavior by management, i.e., earnings management. Value-based management (VBM) systems are employed to counteract self-serving managerial behavior in general, as they shall mitigate...

This paper examines the economic determinants that lead German firms to adopt value-based management and control systems (VBMSs). Further, we investigate whether firms' operating performance improves after VBMS adoption. Using a hand-collected data set of German listed firms covering 1,575...