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on Accounting and Auditing |
| By: | Jia, Y. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper provides experimental evidence on how incentive compensation, peer-group behavior, and audit (team) effectiveness influence managerial reporting behavior. Results show that an increase in incentive compensation intensity induces subjects to report less truthfully. High level of peer honesty promotes truthful reporting; however, the effects are weaker when incentive compensation intensity is high. Audit (team) effectiveness shows no significant influence on reporting behavior. The results provide the first clear evidence that firms need to consider carefully the effect of incentive compensation as well as the influence of peer groups when designing contracts. Furthermore, without a credible penalty for untruthful financial report, increased audit (team) effectiveness will not promote honest reporting. |
| Keywords: | Managerial honesty; Incentive compensation intensity; Peer behavior; Audit effectiveness |
| JEL: | G30 J33 M41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200728&r=acc |
| By: | Matschke, Manfred Jürgen; Brösel, Gerrit |
| Abstract: | After a brief overview of different company valuation theories, this paper presents the main functions (decision, arbitration, and argument or negotiation function) of company valuation according to the functional (i.e. purpose-oriented) theory. The main body of the paper focusses on the decision function and shows how the decision value can be derived as a subjective limit value that different economic agents assign to the company. Finally, the differences between the functional and the market value oriented theory of company valuation are discussed. |
| Keywords: | Unternehmensbewertung; company valuation; decision function; subjective limit value; оценкa предприятий |
| JEL: | M20 G11 M40 G34 G31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4610&r=acc |