TRACING THE EVOLUTION OF RESEARCH ON INTERNATIONAL ACCOUNTING HARMONIZATION

In contrast, privately held firms have relatively concentrated ownership structures andhence can efficiently communicate among shareholders information via private channels.Therefore, financial information and reported earnings are less important incommunicating firm performance, which in turn makes private firms less likely to expendresources (e.g., hiring a high quality auditor) to produce earnings that are highlyinformative about economic performance.4 Moreover, reported earnings can assume adifferent role than for public firms. For instance, private firms face less of a tradeoff ifthey manage earnings to minimize taxes but make them less informative in the process.Alternatively, earnings can be used in determining dividends and other payouts...
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TRACING THE EVOLUTION OF RESEARCH ON INTERNATIONAL ACCOUNTING HARMONIZATION