Sunil Dutta

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anonymous referee and seminar participants at University of Minnesota for their comments and suggestions. Abstract This paper examines how various revenue recognition rules affect the incentive properties of accounting information in a stewardship setting. Our analysis demonstrates that if revenues are recognized according to the realization principle, a(More)
This paper examines the choice of asset valuation rules from a managerial control perspective. A manager creates value for a rm through his eeort choices. To support its operating activities, the rm also engages in nancing activities such as credit sales to its customers. Since such nancing activities merely change the pattern of cash ows across periods, an(More)
In order to shed some light on the desirability of hedge disclosures, I investigate the consequences of hedge disclosures on a firm's risk management strategy. Several major results emerge from this analysis. First, greater transparency about a firm's derivative activities is not necessarily a panacea for imprudent risk management strategies. I show that(More)
This paper demonstrates that conservative aggregation in accounting often improves the overall quality of information produced, and therefore enhances the welfare of accounting information users. We study the optimal accounting policy when a …rm can control the quality of accounting information through costly and noncontractible action. In our model, the(More)
* I would like to thank two anonymous reviewers and the associate editor for many useful comments. I have also benefited from the remarks of Abstract This paper characterizes optimal pay-performance sensitivities of compensation contracts for managers who have private information about their skills, and those skills affect their outside employment(More)
Bill Rogerson and two anonymous reviewers for many helpful comments and suggestions. Abstract This paper develops a multiperiod principal-agent model in which a manager must be given incentives to undertake investments and to exert personally costly effort. Investments are " soft " (e.g., intangible assets) and therefore entail measurement errors for the(More)
This paper investigates, both theoretically and empirically, how earnings management and ownership retention interact, and how these two jointly affect the equilibrium market valuation of IPO firms in the presence of information asymmetry. Analytically, this paper extends the univariate signaling framework of Leland and Pyle (1977) and derives an efficient(More)