Abstract. The long search for accounting principles has tended historically to be practice ‐and standards‐oriented. It is the author's contention that accountants might do better to think of themselves first and foremost as being involved in an intellectual discipline. Concern should be with subject matter , the nature of theory employed to handle problems dealing with that subject matter , and the methodology to be employed in verifying that theory. What has been put forward as a revolution in accounting thought in recent years may in this context come out as something more evolutionary in nature. We have: (1) useful extensions in subject matter — Information Economics and Agency Theory in particular; and (2) a sometimes healthy emphasis on and sometimes unhealthy obsession with empiricism in both macro (security market) and micro (choice decision) research. In fact, concern with both positive and normative questions, and employment of both logic and empiricism in our thinking, are essential in the study and practice of our discipline. The best of new thinking would seem to be complementary with , rather than a substitute for the best of what has gone on before. Résumé. La longue quête de «principes comptables» a été orientée historiquement vers la pratique et les normes. De l'avis de l'auteur, les comptables feraient mieux de se considérer comme œuvrant tout d'abord au sein d'une discipline intellectuelle. L'intérêt devrait porter sur le sujet , la nature de la théorie utilisée afin de prendre en charge les problèmes reliés audit sujet , et la méthodologie à être utilisée dans la vérification de cette théorie. Ce qui a été avancé dans les dernières années comme une révolution de la pensée comptable pourrait donner lieu dans ce contexte à quelque chose d'une nature plus évolutionniste. Nous possédons (1) des prolongements utiles dans le sujet — particulièrement l'économique de l'information et la théorie mandant‐mandataire; et (2) parfois une saine importance et à l'occasion une obsession malsaine de l'empirisme, accordées à la fois aux recherches de type macro (marchés financiers) et micro (décisions et choix des individus). De fait, le souci pour à la fois des questions positives et normatives, et l'utilisation dans notre réflexion à la fois de logique et d'empirisme, sont essentiels à l'étude et à la pratique de notre discipline. Les meilleurs aspects de la nouvelle pensée devraient être un complément plutôt qu'un substitut aux meilleurs aspects de l'approche antérieure.

This paper develops a positive theory of trade credit based on its use as a financial response to deterministic variations in demand. The operating alternatives to trade credit, which include the use of storage or additional capacity, are modeled using results from the peak-load pricing literature. The paper shows that the extension of credit partitions the buyer's inventory cost and permits specialization at incurring the components of this cost. This specialization is economical when the seller has an advantage at incurring the financial cost and does not have an advantage at incurring the operating cost of accommodating variable demand. Conditions that provide these necessary and sufficient cost relationships are described. The paper also shows that a reduction in costs rather than an increase in revenues is the source of both the buyer's and seller's increase in wealth.

This paper documents the effects of large (block) transactions on the prices of common stocks traded on the New York Stock Exchange. We examine whether mean temporary and permanent price effects associated with large and small transactions differ and whether the price effects vary cross-sectionally according to the size of the block. Alternative definitions of block size are investigated – percentage of the equity traded, block volume in relation to normal trading volume, and dollar value of the block. The results suggest that price effects are predominantly temporary for seller-initiated transactions and permanent for buyer-initiated transactions.

This paper has two parts. The first part concentrates on modeling transitions out of unemployment using aggregated gross flow data. Models are estimated using monthly transition probabilities for March-April 1984. This analysis produces evidence consistent with negative duration dependence but sheds no light on the role of macroeconomic factors. The second part focuses on this issue. A time-series analysis of the proportion of long-term unemployment using data for four age and sex groups provides evidence that a proportionately greater increase in long-term unemployment in Australia in the 1970s has been associated with reduction in job availability and the effect of certain supply shocks.

A basic tool of modern econometrics is a uniform law of large numbers (LLN). It is a primary ingredient used in proving consistency and asymptotic normality of parametric and nonparametric estimators in nonlinear econometric models. Thus, in a well-known review article, Burguete, Gallant, and Sousa [8, p. 162] introduce a uniform LLN with the statement: following theorem is the result upon which the asymptotic theory of nonlinear econometrics rests. So pervasive is the use of uniform LLNs, that numerous authors appeal to an unspecified generic uniform LLN. Others appeal to some specific result. The purpose of this paper is to provide a generic uniform LLN that is sufficiently general to incorporate most applications of uniform LLNs in the nonlinear econometrics literature. In summary, the paper presents a result that can be used to turn state of the art pointwise LLNs into uniform LLNs over compact sets, with the addition of a single smoothness condition -- either a Lipschitz condition or a derivative condition. The latter is particularly easy to verify, and is implied by common assumptions used to prove asymptotic normality of estimators. Thus, the additional condition is not particularly restrictive. In contrast to other uniform LLNs that appear in the literature, the one given here allows the full range of heterogeneity of summands (i.e., non-identical distributions), and temporal dependence, that is available with pointwise LLNs.

Beaver, Lambert and Morse (1980) suggest that prices may be useful in forecasting future earnings. We explore the information content of prices with respect to earnings by focusing on firm size and its relation to the predictive accuracy of price-based earnings forecasts. Firm size proxies for the amount of information and for the number of traders and professional analysts processing the available information about an enterprise. Our empirical results are consistent with the hypothesis that price-based earnings will outperform univariate time series forecasts by a greater margin for larger firms than for smaller firms.

Abstract ABSTRACT: This paper investigates the extent to which models based on financial and market variables predict auditors' decisions to issue qualified audit reports in situations involving contingencies or uncertainties. A probit model is developed with the dependent variable indicating whether the firm received a qualified opinion, and the independent variables representing publicly available financial and market variables. The estimated model distinguishes between unqualified (clean) opinions and first-time qualifications and between types of qualifications (e.g., going concern, litigation, asset realizing, and multiple qualifications) in the year of the qualification, for both an estimation sample and a holdout sample. The predictive accuracy of the estimated model is evaluated in terms of misclassification costs for alternative costs of type I and type II errors and for specific prior probabilities of qualified and clean opinions.

[This paper investigates the extent to which models based on financial and market variables predict auditors' decisions to issue qualified audit reports in situations involving contingencies or uncertainties. A probit model is developed with the dependent variable indicating whether the firm received a qualified opinion, and the independent variables representing publicly available financial and market variables. The estimated model distinguishes between unqualified (clean) opinions and first-time qualifications and between types of qualifications (e.g., going concern, litigation, asset realizing, and multiple qualifications) in the year of the qualification, for both an estimation sample and a holdout sample. The predictive accuracy of the estimated model is evaluated in terms of misclassification costs for alternative costs of type I and type II errors and for specific prior probabilities of qualified and clean opinions.]