Discussion of “Accounting Recognition, Moral Hazard, and Communicationâ€

Richard A. Young

Contemporary Accounting Research, 2000, vol. 17, issue 3, 491-496

Abstract: This paper addresses two issues within an agency setting. First, it identifies conditions under which late recognition of an event is preferred to early recognition in the absence of communication of other private information. Second, it demonstrates that the agent's ability to voluntarily disclose his or her private information interacts with the preference for early versus late recognition. Of special interest is the case where early recognition is preferred to late when there is no other source of information, but late recognition is preferred in the presence of a secondary source. I have three types of comments on the paper. The first summarizes the important aspects of the model. The second involves the interpretation of the control problem as accounting recognition. The third contains suggestions regarding how one might bring a valuation perspective into the control setting.

Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:wly:coacre:v:17:y:2000:i:3:p:491-496

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