We find empirical evidence that clients' real activities manipulation (RAM) varies across individual auditors. More specifically, both audit-firm and individual-auditor fixed effects on RAM are significant; yet only the latter remain significant in regressions including auditors' propensity to...

This paper examines the strategic role of quot;cost of capitalquot; in residual income measurement in an oligopoly. Because of imperfect competition in the product market, firm market valuation and managerial performance evaluation based on residual income measures or Economic Value Added (EVA)...

One common reason that firms do not update costing systems to improve cost information is the tradeoff deficit between benefits and implementation costs of such an updated system. This may be true in many cases; but there are situations in that more accurate product costs result in lower profit...

This paper examines the trade-off between common and peers' specific risks in relative performance evaluation (RPE). We establish that in order to remove common risk completely from management compensation contracts, it is sufficient and necessary that peers' weighted specific risks are lower....