Subjective Performance Measures in Optimal Incentive Contracts

Objective measures of performance are seldom perfect. In response, incentive contracts often include important subjective components that mitigate incentive distortions caused by imperfect objective measures. This paper explores the combined use of subjective and objective performance measures in (respectively) implicit and explicit incentive contracts. Naturally, objective and subjective measures often are substitutes, sometimes strikingly so: we show that if objective measures are sufficiently close to perfect then no implicit contracts are feasible (because the firm's fallback position after reneging on an implicit contact is too attractive). We also show, however, that objective and subjective measures can reinforce each other: if objective measures become more accurate then in some circumstances the optimal contract puts more weight on subjective measures (because the improved objective measures increase the value of the ongoing relationship, and so reduce the firm's incentive to renege). We also analyze the use of subjective weights on objective performance measures, and provide case-study evidence consistent with our analyses.

Alien Registration- Murphy, George (Garland, Penobscot County)

https://digitalmaine.com/alien_docs/9862/thumbnail.jp

Henri Temianka Correspondence; (gmurphy)

https://digitalcommons.chapman.edu/temianka_correspondence/2249/thumbnail.jp

Alien Registration- Murphy, George W. (Caribou, Aroostook County)

https://digitalmaine.com/alien_docs/26158/thumbnail.jp

Early Canadian financial statement disclosure legislation

The Ontario Companies Act of 1907 was one of the earliest legislative enactments to require presentation at company annual meetings, and specify the content of, the financial statements of commercial and manufacturing companies. The study describes the background to this important event and points to the two main influencing forces: the office of the Provincial Secretary and the equally active and informed Institute of Chartered Accountants of Ontario. The concern for disclosure suggests that Ontario was in the forefront of accounting development in the latter part of the nineteenth and the first decade of the twentieth centuries

Some aspects of auditing evolution in Canada

A chronology of significant changes in Canadian auditing legislation, pronouncements and practices, from the late nineteenth century to the present, reveals the strong influence of English and American sources. The evolution of mandatory audits, of profit and loss audits, and of the wording of the standard audit report demonstrates these influences