Course Description:
The course focuses on contractual relationships between the firm, the manager, the auditor and/or outside investors. Asymmetric information and opposing objectives between the contracting parties lead to agency problems. The course will analyze the strategic interactions of the participants and it will addresses the specific agency problems. A special emphasis will be put on the accounting information system and the value of accounting information in agency settings.
Learning Objectives:
After the course, the students will:
- become aware of the analytical accounting research topics in accounting,
- have an understanding of the analytical research in accounting and its implications,
- be able to differentiate and apply the agency settings to different accounting issues,
- be able to summarize the assumptions of the analytical contracting models in accounting and state, explain and understand the main results of these models.
Agenda:
- Introduction
- Accounting Research Topics: Precision of Accounting Information
- Moral Hazard Problem and Accounting Information
- Adverse Selection Problem and Accounting Information
- Signaling
- Applications
Literature:
- Macho-Stadler, I. and Perez-Castrillo, J.D. (2001): An Introduction to the Economics of Information, Oxford.
- Original Research Papers (e.g. Drymiotes 2011: Information Precision and Manipulation Incentives, Journal of Management Accounting Research)