-
The Experience
-
About Stanford GSB
About Our Degree Programs
-
-
The Programs
-
Full-Time Degree Programs
Non-Degree & Certificate Programs
-
-
Faculty & Research
-
Faculty
Faculty Research
Research Hub
Centers & Institutes
-
-
Insights
-
Topics
-
-
Alumni
-
Welcome, Alumni
-
-
Events
-
Admission Events & Information Sessions
-
Discretionary Disclosures Using a Certifier
Discretionary Disclosures Using a Certifier
Journal of Accounting and Economics . February
2015, Vol. 59, Issue 1, Pages 25-40
This paper studies two disclosure regimes when a firm with superior private information must rely on a strategic certifier to disclose credibly its prospects. In the ex ante (ex post) disclosure regime, the firm must decide on whether to hire the certifier before (after) observing the certifier׳s noisy assessment. Endogenously determined certification fees can actually cause the disclosure probability to decrease in disclosure precision. In the ex ante regime, favorable disclosures are more informative than unfavorable disclosures because of additional positive signaling effect. In the ex post (ex ante) regime, the certifier has incentives to increase (decrease) the disclosure precision.