Discussion of 'Contracting Theory and Accounting', Journal of Accounting and Economics
Professor Lambert provides a very useful synthesis of the major issues in managerial accounting and the insights that agency theory has provided on those issues. In this discussion, I highlight some of the limitations of these models in examining accounting measurement questions. Lambert calls for additional work in multiperiod contracting models, and I discuss some of the modeling choices that must be made in such work. Finally, I present some thoughts on the relation between contract models and empirical research.
Magee, Robert. 2001. Discussion of 'Contracting Theory and Accounting'. Journal of Accounting and Economics. 32(1-3): 89-96.