Information Precision and Manipulation Incentives

Posted: 3 Sep 2010

Date Written: September 2010


Recent corporate governance failures have prompted regulators and legislators to introduce new rules and legislation aimed at improving corporate governance. In this paper, I highlight a potential unintended consequence of such actions by showing that increasing oversight may sometimes be the catalyst for more manipulation. The key behind this result is the managers' potential ability to undermine oversight through manipulation choices. Absent an interaction between manipulation choices and oversight efficacy, increasing oversight results in less manipulation.

Keywords: Corporate governance, Manipulation, Monitoring

JEL Classification: D80, G34, M40

Suggested Citation

Drymiotes, George, Information Precision and Manipulation Incentives (September 2010). Journal of Management Accounting Research, Forthcoming, Available at SSRN:

George Drymiotes (Contact Author)

Texas Christian University ( email )

M.J. Neeley School of Business
TCU Box 298530
Fort Worth, TX 76129
United States
817 257 5448 (Phone)

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