Providing Managerial Accounting Information in the Presence of a Supplier

Kopel, Michael and Riegler, Christian and Schneider, Georg ORCID: https://orcid.org/0000-0001-7301-556X (2019) Providing Managerial Accounting Information in the Presence of a Supplier. European Accounting Review. pp. 1-21. ISSN 0963-8180

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Abstract

This paper identifies a novel effect which is crucial for the design of a management accountinginformation system. In contrast to prior literature, we explicitly model the firm's relationship to a supplier. We show that in addition to the previously identified trade-off – benefits of more information versus indirector direct (agency) costs of information acquisition – another effect occurs: the input price effect. This effect influences the optimal design of the management accounting information system and changes the Regimes where information acquisition is optimal for the principal. Also, in case of endogenous input prices we demonstrate that – perhaps surprisingly – paying an information rent to the agent can be beneficial because it works as a commitment towards an over-charging supplier to exploit the input price effect.

Item Type: Article
Keywords: Information systems; Agency conflicts; Supply side; Input price effect
Divisions: Departments > Finance, Accounting and Statistics > Accounting and Auditing > International Accounting
Version of the Document: Published
Depositing User: ePub Administrator
Date Deposited: 12 Dec 2019 13:43
Last Modified: 12 Dec 2019 13:43
Related URLs:
URI: https://epub.wu.ac.at/id/eprint/7363

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