The principles of transparency and disclosure are visible everywhere from fast-food menus to financial regulation. But if lawmakers don’t consider the behavior of both markets and consumers, better information may not translate to smarter shoppers.
Policymakers have succeeded in using financial regulation to effect nonfinancial change.
The 1993 Maastricht Treaty, which formally established the European Union, set out to achieve “four freedoms”: the free movement of goods, services, people, and money across the continent.
Researchers find that financial reporting incentives influence accounting quality, despite the many potential benefits from international accounting harmonization under IFRS.