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http://ssrn.com/abstract=1934322
 
 

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A Framework for Research on Corporate Accountability Reporting


Karthik Ramanna


Harvard University - Harvard Business School

October 1, 2012

Accounting Horizons 26, No. 2 (June 2013)
Harvard Business School Accounting & Management Unit Working Paper No. 12-021

Abstract:     
This paper provides an accounting-based conceptual framing of the phenomenon of corporate accountability reporting. Such reporting is seen as arising from a delegator’s (e.g., a citizenry) demand to hold a delegate (e.g., shareholders) to account. When effective, corporate accountability reporting can internalize certain externalities into firms’ resource-allocation decisions, although doing so will not always serve shareholders’ interests. I leverage the positive accounting literature’s current understanding of properties of financial reports to develop three hypotheses on corporate accountability reporting. I argue that an accountability reporting system is likely to be more useful to a delegator if it: (1) mitigates information advantages across delegates and delegators; (2) reports both stocks and flows in the measures of account; and (3) has a mutually agreeable due process to match across periods the actions of delegates and the outcomes of those actions. I show how the successive incidence of these properties in observed corporate accountability reports can be used to determine whether and how those reports create or destroy value for shareholders and other constituencies.

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Date posted: September 28, 2011 ; Last revised: May 8, 2013

Suggested Citation

Ramanna, Karthik, A Framework for Research on Corporate Accountability Reporting (October 1, 2012). Accounting Horizons 26, No. 2 (June 2013); Harvard Business School Accounting & Management Unit Working Paper No. 12-021. Available at SSRN: http://ssrn.com/abstract=1934322 or http://dx.doi.org/10.2139/ssrn.1934322

Contact Information

Karthik Ramanna (Contact Author)
Harvard University - Harvard Business School ( email )
Morgan 389
Boston, MA 02163
United States
HOME PAGE: http://www.hbs.edu/kramanna
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