A Model of Aggregate Reporting Quality

Journal of Financial Reporting, 2016

46 Pages Posted: 29 Jul 2014 Last revised: 3 Jul 2018

See all articles by Venky Nagar

Venky Nagar

University of Michigan, Stephen M. Ross School of Business

Paolo Petacchi

Georgetown University - Robert Emmett McDonough School of Business

Date Written: September 27, 2016

Abstract

We characterize firms’ aggregate reporting quality in an economy where a rational capital market as well as a regulator discipline firms’ reporting choices. When the regulator is resource constrained, multiple aggregate reporting choices are possible in equilibrium. This multiplicity is driven not just by the regulatory constraint, but also by how this constraint interacts with managerial incentives and the level of reporting discretion available to firms. We discuss the empirical implications of these findings.

Keywords: compensation, regulation, crises

JEL Classification: G18

Suggested Citation

Nagar, Venky and Petacchi, Paolo, A Model of Aggregate Reporting Quality (September 27, 2016). Journal of Financial Reporting, 2016. Available at SSRN: https://ssrn.com/abstract=2473699 or http://dx.doi.org/10.2139/ssrn.2473699

Venky Nagar (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-647-3292 (Phone)
734-764-3146 (Fax)

Paolo Petacchi

Georgetown University - Robert Emmett McDonough School of Business ( email )

37th and O Streets, NW
Washington, DC 20057
United States

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