Providing Managerial Accounting Information in the Presence of a Supplier

Michael Kopel, Christian Riegler and Georg Schneider

European Accounting Review, 2020, vol. 29, issue 4, 803-823

Abstract: This paper identifies a novel effect which is crucial for the design of a management accounting information system. In contrast to prior literature, we explicitly model the firm's relationship to a supplier. We show that in addition to the previously identified trade-off – benefits of more information versus indirect or direct (agency) costs of information acquisition – another effect occurs: the input price effect. This effect influences the optimal design of the management accounting information system and changes the regimes where information acquisition is optimal for the principal. Also, in case of endogenous input prices we demonstrate that – perhaps surprisingly – paying an information rent to the agent can be beneficial because it works as a commitment towards an over-charging supplier to exploit the input price effect.

Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09638180.2019.1694955 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:euract:v:29:y:2020:i:4:p:803-823

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REAR20

DOI: 10.1080/09638180.2019.1694955

Access Statistics for this article

European Accounting Review is currently edited by Laurence van Lent

More articles in European Accounting Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().