Are Unmanaged Earnings Always Better for Shareholders?

Anil Arya (), Shyam Sunder and Jonathan Glover

Yale School of Management Working Papers from Yale School of Management

Abstract: The push for increased transparency in financial reporting and corporate governance serves shareholders only up to a limit. The problem of assessing the value of transparency to shareholders is subtle because both the level and pattern of earnings can convey information. Even when earnings management conceals information, it can be beneficial to shareholders. Distinguishing between ex ante and ex post efficiency underscores the advantages of achieving a balance between transparency and privacy in corporations.

Keywords: Earnings; Management (search for similar items in EconPapers)
Date: 2002-11-01, Revised 2003-02-01
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Citations: View citations in EconPapers (44)

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Working Paper: Are Unmanaged Earnings Always Better for Shareholders? (2003)
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