our focus will be on what asymmetric information, moral hazard, and adverse selection have to do with corporate hiring staff accountants.
Instructions
Consider the following statement:
Many corporations require all staff accountants to hold not only a degree in accounting but also to have a CPA license. There is a substantial higher cost to hiring CPAs.
In your discussion post, address the following:
Speculate on why corporations do not lower their explicit payroll cost by hiring accountants without a CPA. Consider how asymmetric information, moral hazard, and adverse selection may impact the perception of risk.