Analytical model demonstrates verification of historical cost reports in a division manager's context, indicating its effectiveness.
Studies a stylized model in which a division manager's historical cost reports are verified. Verification in one-period setting; Full-information solution; Solution in the presence of unverified cost reports; Solution in the presence of verification; Verification in two-period setting; Role of historical information.
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Arya et al. (1996) studied this question.
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