The role of information and financial reporting in corporate governance and debt contracting

We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future...

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Veröffentlicht in:Journal of accounting & economics 2010-12, Vol.50 (2), p.179-234
Hauptverfasser: Armstrong, Christopher S., Guay, Wayne R., Weber, Joseph P.
Format: Artikel
Sprache:eng
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Zusammenfassung:We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multiperiod contracts among managers, directors, shareholders, and creditors.
ISSN:0165-4101
1879-1980
DOI:10.1016/j.jacceco.2010.10.001