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Biases in Accounting and Nonaccounting Information: Substitutes or Complements?

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  • XU JIANG

Abstract

This paper studies how bias in nonaccounting and in accounting information should be related. Bias in accounting information is modeled, as in some recent literature, as an alteration in the relative information content of accounting numbers. The optimal bias in one type of information is shown to be a complement of the bias in the other type. This result can be applied in various settings to explain a number of phenomena.

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  • Xu Jiang, 2016. "Biases in Accounting and Nonaccounting Information: Substitutes or Complements?," Journal of Accounting Research, Wiley Blackwell, vol. 54(5), pages 1297-1330, December.
    • Handle: RePEc:bla:joares:v:54:y:2016:i:5:p:1297-1330
    DOI: 10.1111/1475-679X.12153
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    Cited by:

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    2. Lu, Tong & Ruan, Lijun, 2024. "Coordination and Conservatism," Finance Research Letters, Elsevier, vol. 61(C).
    3. Qi Chen & Zeqiong Huang & Xu Jiang & Gaoqing Zhang & Yun Zhang, 2021. "Asymmetric Reporting Timeliness and Informational Feedback," Management Science, INFORMS, vol. 67(8), pages 5194-5208, August.
    4. Kai Du & Steven Huddart, 2020. "Economic persistence, earnings informativeness, and stock return regularities," Review of Accounting Studies, Springer, vol. 25(4), pages 1263-1300, December.
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    6. Laux, Christian & Laux, Volker, 2024. "Accounting conservatism and managerial information acquisition," Journal of Accounting and Economics, Elsevier, vol. 77(2).

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