Among many factors contributing to a corporation's success, none is more crucial than reputation. It affects the way management makes decisions and the positions it takes, and how it takes them, on critical issues. A good reputation is also a signal to the market-one way that stakeholders will know that a corporation is successful. Riahi-Belkaoui looks at the most crucial functions and influences that determine corporate reputation, among them, the way it affects a firm's market value; the quality of its disclosures; how well its earnings are managed, how its executives are compensated. He also addresses other processes, such as international production, the informativeness of earnings, accounting choices, and the characteristics of earnings forecasts. The result is a succinct, readable, probing study for corporate decision makers in various functions of the firm, their academic colleagues, and knowledgeable onlookers who need ways to evaluate and buttress their investment decisions.

Riahi-Belkaoui examines the process of reputation-building first, then the role of corporate reputation and how market value and accounting value differ. He moves to the impact of contextual factors of multinationality and corporate reputation on accrual and cash flow valuation models. In Chapter Four he shows how corporate audiences construct the reputations of firms by interpreting information signals about the firms from various monitors. He then reports the result of an empirical study of the 100 most international firms, which supports the general hypothesis that corporate audiences construct reputations on the basis of information and firms' earnings management. In Chapter Six he turns to the relationship between the level of corporate reputation and managers' ccounting choices, and in Chapter Seven examines the value relevance of earnings, cash flows, multinationality, and corporate reputation. Chapter Eight advances the hypothesis that corporate boards control top management behavior by means of compensation, but also by judging them on organizational effectiveness and social performance. He restates a general model of international production, and in Chapter 10, hypothesizes that the level of corporate reputation affects both the informativeness of earnings and the magnitude of discretionary accounting accrual adjustments. He ends the book by providing empirical evidence of the relationship between economic performance and organizational effectiveness, a measure of overall social performance.

AHMED RIAHI-BELKAOUI is CBA Distinguished Professor of Accounting in the College of Business Administration, University of Illinois at Chicago./e Author of more than 45 Quorum books, published or forthcoming, and co-author of several more, he is also a prolific contributor to the scholarly and professional journals of his field, and has served on numerous editorial boards that oversee them.