From The Hill
It’s widely assumed that executives are less likely to inflate their earnings when they work at high profile companies that operate under a good deal of regulatory oversight.
Yet it’s also widely known that managers in high-profile companies face tremendous pressure from investors to meet or beat Wall Street estimates every quarter, which incentivizes them to overstate their company’s performance.
How should policymakers looking to curb accounting fraud reconcile these countervailing forces? My colleagues —Daniel J. Taylor and Robert E. Verrecchia, both at the University of Pennsylvania’s Wharton School — and I set out to answer that question. Read More