ABSTRACT
At the heart of a free enterprise system is the free flow of reliable information by which creditors, investors, and regulators make informed decisions about the allocation of resources or the need for governmental action. The banker deciding whether to approve a loan, the investor making a decision to buy or sell securities, the local congressman evaluating the fairness of utility rates-all are relying on information provided by others. In many of these situations, the goals of the providers of information differ from those pursued by users of the information (Watts & Zimmerman, 1986). For instance, in reporting on its own administration of a business, management can hardly be expected to be entirely impartial.
