The Relative Importance of Firm Incentives versus Country Factors in the Demand for Assurance Services by Private Entities

@inproceedings{Francis2011TheRI,
  title={The Relative Importance of Firm Incentives versus Country Factors in the Demand for Assurance Services by Private Entities},
  author={Jere R. Francis and Inder K. Khurana and Xiumin Martin and Raynolde Pereira},
  year={2011}
}
Agency theory views the firm as a nexus of contracts in which information asymmetry exists and creates a conflict of interest between contracting parties (Alchian and Demsetz 1972; Jensen and Meckling 1976). In the limit, contracting will not occur if information asymmetry is not sufficiently resolved, and in this scenario agency problems can be mitigated and contracting facilitated by governance mechanisms like accounting and auditing. Specifically, accounting reports increase a firm’s… CONTINUE READING