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Agency Setting (agency + setting)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting75%

Selected Abstracts

Revenue Recognition in a Multiperiod Agency Setting

JOURNAL OF ACCOUNTING RESEARCH, Issue 1 2002
Sunil Dutta
This paper examines how various revenue recognition rules affect the incentive properties of accounting information in a stewardship setting. Our analysis demonstrates that if revenues are recognized according to the realization principle, a single performance measure based on aggregated accounting information can be used to provide desirable production and effort incentives to the manager. In contrast, mark-to-market accounting does not provide efficient aggregation of raw information to solve the stewardship problem. Mark-to-market accounting, though sensible from a valuation perspective, fails to provide desirable incentives because it relies on the anticipated, rather than the actual, performance of the manager. We also consider a setting in which the manager can control the timing of the firm's sales. It then becomes desirable to modify the realization principle and apply the lower-of-cost-or-market valuation rule. The desirable accounting thus exhibits a conservative bias. [source]

The Effect of Earnings Forecasts on Earnings Management

JOURNAL OF ACCOUNTING RESEARCH, Issue 3 2002
Sunil Dutta
We develop a theory of the association between earnings management and voluntary management forecasts in an agency setting. Earnings management is modeled as a "window dressing" action that can increase the firm's reported accounting earnings but has no impact on the firm's real cash flows. Earnings forecasts are modeled as the manager's communication of the firm's future cash flows. We show that it is easier to prevent the manager from managing earnings if he is asked to forecast earnings. We also show that earnings management is more likely to follow high earnings forecasts than low earnings forecasts. Finally, our analysis shows that shareholders may not find it optimal to prohibit earnings management. Earlier results rationalize earnings management by violating some assumption underlying the Revelation Principle. By contrast, in our model the principal can make full commitments and communication is unrestricted. Nonetheless, earnings management can be beneficial as it reduces the cost of eliciting truthful forecasts. [source]

Committees and Special Interests

JOURNAL OF PUBLIC ECONOMIC THEORY, Issue 2 2008
MIKE FELGENHAUER
This paper studies the aggregation of decentralized information in committees under open and closed voting in the presence of external influence. We show that under one-sided influence decision quality may be nonmonotonic in the committee members' ability. Furthermore, restricting the information of interest groups may reduce the bias toward special interest politics. This result holds in a single and in a common agency setting, where opposing interest groups' activities do not cancel out in equilibrium. Moreover, there are cases where benefits from increasing the number of decision makers can only be reaped if the committee's sessions are not public. [source]

Assessing families and other client systems in community-based programmes: development of the CALF

CHILD & FAMILY SOCIAL WORK, Issue 2 2007
Ana M. Leon
ABSTRACT Programmes providing services to children and families often face the challenge of assessing not only the child referred, but also the child's family system and its individual members. Recognizing that household/family members can cause, contribute to or affect a child's problems requires that human service agencies utilize assessment tools capable of assessing family members across the lifespan. The literature references many assessment tools used by clinical programmes in mental-health settings that are not well suited to use in social service agencies with multidisciplinary staff at different skill levels. As a response to this dilemma, the authors have developed the Collaborative Assessment of Life Functioning (CALF), a user-friendly tool that assesses various areas of life functioning. Based on Maslow's motivation theory, person-in-environment and systems theories, the CALF can be used with various client systems. This paper describes the development of the tool, its purpose and use, the importance of assessment tools in the helping process and considerations for agencies wishing to use an assessment tool like the CALF. The authors also discuss the applicability of the CALF in human services and social service agency settings and with diverse client populations. [source]