Accounting Papers

Document Type

Journal Article

Date of this Version

12-2010

Publication Source

Journal of Accounting and Economics

Volume

50

Issue

2-3

Start Page

179

Last Page

234

DOI

10.1016/j.jacceco.2010.10.001

Abstract

We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multiperiod contracts among managers, directors, shareholders, and creditors.

Copyright/Permission Statement

© . This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

financial accounting, corporate governance, board structure, executive compensation, debt contracts, informal contracts

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Date Posted: 27 November 2017

This document has been peer reviewed.