Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5107799 | Research in Accounting Regulation | 2017 | 4 Pages |
Abstract
This note explores how the financial reporting environment for listed companies is a common good put at risk by participants with incentives to extract benefits at the cost of the investing public. Disclosure of misleading financial information confers economic gain for a few but pollutes the environment and reduces its usefulness for all. After showing how a variant of the prisoner's dilemma may explain Enron-era scandals, the note discusses how U.S. government intervention was the only practical solution to repair damage to the financial reporting Commons. The implication of this note is that government involvement in financial reporting is here to stay.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Thomas A. King,