Accounting Manipulation, Peer Pressure, and Internal Control
研究企业投资内部控制以减少会计操纵，发现同行经理的操纵决策是战略互补的，一家企业的内部控制投资对同行有正外部性，导致企业投资不足，为监管干预提供了理由。
ABSTRACT We study firms' investment in internal controls to reduce accounting manipulation. We first show that peer managers' manipulation decisions are strategic complements: one manager manipulates more if he believes that reports of peer firms are more likely to be manipulated. As a result, one firm's investment in internal controls has a positive externality on peer firms. It reduces its own manager's manipulation, which, in turn, mitigates the manipulation pressure on managers at peer firms. Firms do not internalize this positive externality and, thus, underinvest in their internal controls over financial reporting. The problem of underinvestment provides one justification for regulatory intervention in firms' internal controls choices. JEL Classifications: G18; M41; M48; K22.