Moral hazard, firms’ internal governance and management earnings forecasts

• Main Author: LEE, Jimmy
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2010
• Subjects: Earnings guidance; corporate governance; executive compensation; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/796; https://ink.library.smu.edu.sg/context/soa_research/article/1795/viewcontent/SSRN_id1650289.pdf
• Institution: Singapore Management University

This paper investigates the role of management earnings forecasts in mitigating information asymmetry between investors andmanagers relating to moral hazard, and explains how earnings guidance facilitates monitoring. I demonstrate that firms that are more susceptible to moral hazard problems and mor...