Đang chuẩn bị liên kết để tải về tài liệu:
Ebook Financial accounting theory (7/E): Part 2

(BQ) Part 2 book “Financial accounting theory” has contents: The efficient contracting approach to decision usefulness, an analysis of conflict, executive compensation, earnings management, economic issues, standard setting - political issues. | www.downloadslide.net Chapter 8 The Efficient Contracting Approach to Decision Usefulness Figure 8.1 Organization of Chapter 8 Sources of demand for efficient contracting Concept of efficient contracting Accounting policies for efficient contracting Employee stock options Contract efficiency versus opportunism Implicit contracts, noncooperative games Contract rigidity 8.1 OVERVIEW You may have noticed that there has been little reference to corporate management to this point. Yet, in Section 1.4 we suggested that aiding in efficient corporate governance, including efficient contracting and responsible manager performance, was an important role for financial reporting. This role contrasts with the decision usefulness approach of helping investors predict future firm performance that was the subject of Chapters 3 to 7. This chapter begins our study of financial reporting from management’s perspective. As we shall see, issues of efficient contracting loom large. Efficient contracting theory takes the view that firms1 organize themselves in the most efficient manner, so as to maximize their prospects for survival.2 Some firms are more decentralized than others, some firms conduct activities inside while other firms contract out the same activities, some firms finance more with debt than others, etc. The most efficient form of corporate governance for a particular firm depends on factors such www.downloadslide.net as its legal and institutional environment, its technology, and the degree of competition in its industry. Efficient contracting is a significant component of efficient corporate governance. Indeed, a firm can be largely defined by the contracts it enters into. To enhance corporate governance, these contracts must be efficient. That is, they must optimally balance contract benefits and costs.3 Ultimately, the objective of the theory is to understand and predict managerial accounting policy choice in different circumstances and across different .