Financial statement consolidation, Aggregation, Informational approach

Disclosures, Voluntary Disclosure, Materiality

Credit ratings, Municipal bonds, Financial reporting, Predictive ability

Bond rating, Municipal bonds, Financial reporting, Credit risk

Stallman investigated the effect of allocating or not allocating common costs as these allocations are reflected in divisional income calculations. Questionnaire packets, containing two sets of corporate data and a request for numerous judgments, were sent to a random sample of members on the rosters of the Financial Analysts Federation and the Institute of Chartered Financial Analysts. A total of 121 respondents provided analytically usable data (for a response rate of 11.33 percent). With regards to the sample, McDonald suggested that, if the experiment is repeated, some less sophisticated inventors should be included. 2 The reported results were based on the respondents' judgments of an estimated long-run investment value for a share of stock. Analysis revealed that statistically significant differences in stock valuation esti-

M&A accounting, Earnings management, Pooling of interest method, Purchase pooling

Reviews the book "Investors' Use of Financial Accounting Statement Numbers: A Review of Evidence from Stock Market Research," by George J. Benston.

The purpose of this exploratory research is to assess empirically the potential usefulness of municipal accounting data for explaining voting decisions. The economic theory of voting behavior forms a conceptual foundation for examining the utility of accounting information for discriminating between mayoral election results. A stepwise discriminant analysis was used to develop multivariate models that distinguish between samples of cities clustered into three homogeneous groups on the basis of socio-demographic attributes. The dependent variable for the discriminant analysis was the outcome of elections for mayor in 113 cities with populations exceeding 25,000 in 1977, and the independent variables were municipal accounting ratios. Statistically significant discriminant functions were produced which correctly classified a greater-than-chance percentage of the election outcomes. These results suggest that municipal accounting numbers may provide useful information for explaining voter behavior since they measure the effects of municipal policy decisions consistent with voter assessments.