The trade-off of reliability for relevance within a stewardship setting

• Published in: Managerial and decision economics Vol. 22; no. 6; pp. 315 - 326
• Main Authors: Woodlock, Peter D., Young, Richard A.
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons, Ltd 01.09.2001; John Wiley and Sons; Wiley Periodicals Inc
• Series: Managerial and Decision Economics
• Subjects: Cash flow; Contract incentives; Creative accounting; Disclosure; Economics; Executives; Expected utility; Financial management; Financial performance; Financial reporting; Income distribution; Income level; Internal controls; Limited liability; Management; Permits; Probability; Reliability; Spreading risk; Studies; Trade-off; Truth condition; United States > US

In a single period stewardship setting in which an agent has some reporting discretion, we identify the types of reporting discretion that lead to relevant and reliable reporting. We also provide instances when the reporting discretion available to the agent will cause these two characteristics of r...