RENT ACCOUNTING SYSTEM AS AN INTERNAL CONTROL EFFORTS

Rent Seeking with Efforts and Bids

We introduce bids in a rent-seeking contest. Players compete for a prize. Apart from exerting lobbying efforts, they also submit a bid which is payable only if they win the prize. We show that our model has a unique Nash equilibrium in pure strategies, in which each active player submits the same bid, while the sum of all efforts equals that bid. In equilibrium there is underdissipation of rent.

Accounting Manipulation, Peer Pressure, and Internal Control∗

We study firms’investment in internal control to reduce accounting manipulation. We first show the peer pressure for manipulation: one manager manipulates more if he suspects that reports of peer firms are more likely to be manipulated. As a result, one firm’s investment in internal control has a positive externality on peer firms. It reduces its own manager’s manipulation, which, in turn, miti...

Rent Control

Integrating a Web-Based Intelligent System into an Accounting Information System Course to Teach the Technique of Internal Control Evaluation

The issue of how to increase teaching effectiveness is a major concern to most educators. Understanding how to encourage a student to learn instead of memorize the presented material is one of the greatest problems faced in teaching. The nature of the topic taught contributes to this difficulty where a need for deep understanding may conflict with the need to understand the breadth of the topic...

Internal Rent-Seeking and Optimal Firm Size∗

This paper discusses the optimal firm size in the presence of internal rent seeking. Since firm size has a discouragement effect on the level of individual rent-seeking but also a quantity effect as the number of rent-seekers increases, the interplay of both effects — together with technological considerations — determines whether the employer chooses an inefficiently small or large firm size. ...