Performance measurement manipulation: cherry-picking what to correct

• 成果类型: Article
• 署名作者: Arya, Anil; Glover, Jonathan
• 署名单位: University System of Ohio; Ohio State University; Carnegie Mellon University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-007-9042-3
• 发表日期: 2008
• 页码: 119-139
• 关键词: earnings management; RENEGOTIATION; incentives; CONTRACTS; agencies

摘要

A common feature of managerial and financial reporting is an iterative process wherein various parties selectively correct particular measurements by challenging them and subjecting them to increased scrutiny. We model this feature by adding an agent appeal stage to the standard moral hazard model and show that it can be optimal to allow the agent to decide which performance measures to appeal, despite the agent's incentive to cherry-pick. In the presence of measurement errors, the agent is incentivized by increased opportunities for cherry-picking that arise if he chooses the right vs. the wrong acts.