Truth-Telling

Managers’ manipulation incentive is only one aspect that affects the preparation and use of accounting information. After all, accounting is a language used to describe the firm’s business activities in a reliable way and, as such, it is a very important instrument for the management, both internally and externally. If users perceive that the accounting has been manipulated, they might start relying on some other information system. In turn, this might cause problems for the managers in terms of decreased trust and less overview and control.