Alfred Wagenhofer (Graz University): "Economics of Accounting Quality"

The quality of financial reports is important to external users, particularly investors and lenders, and to the performance measurement of management. The presentation first provides a brief overview of analytical accounting research on institutions that aim at improving accounting quality, for example, auditing and enforcement. Second, it discusses an agency model, which analyzes characteristics of accounting systems that incentivize managers to invest in accounting quality such as, for example, internal controls.