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Discussion of “equilibrium earnings management and managerial compensation in a multiperiod agency setting”

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  • Iván Marinovic

    (Stanford GSB)

Abstract

Dutta and Fan (Rev Account Stud, 2014), this issue, study the implications of earnings management on managerial compensation, in a two-period LEN setting. They analyze the level as well as the evolution of compensation. Furthermore, they consider the possibility of joint moral hazard and adverse selection problems. I discuss the empirical implications of their analysis, in the context of a slightly more general dynamic setting, and examine the robustness of some of their results with respect to the assumption that the principal can enforce claw-backs.

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  • Iván Marinovic, 2014. "Discussion of “equilibrium earnings management and managerial compensation in a multiperiod agency setting”," Review of Accounting Studies, Springer, vol. 19(3), pages 1078-1085, September.
    • Handle: RePEc:spr:reaccs:v:19:y:2014:i:3:d:10.1007_s11142-014-9287-6
    DOI: 10.1007/s11142-014-9287-6
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