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Agency, corporate control and accounting methods–the lifo‐fifo choice
Author(s) -
Dyl Edward A.
Publication year - 1989
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090100209
Subject(s) - fifo and lifo accounting , fifo (computing and electronics) , valuation (finance) , inventory valuation , agency cost , agency (philosophy) , accounting , business , control (management) , accounting method , actuarial science , economics , finance , management , computer science , shareholder , corporate governance , philosophy , epistemology , computer hardware
The study examines the effect of the firm's ownership structure on its management's choice of LIFO or FIFO inventory valuation methods. Managers of widely held firms are found to select the accounting method that furthers their own interests, thus causing the firms' owners to bear agency costs that appear to be substantial.