Knowledge that Transforms

Profit margin, Current cost accounting, Information content, ASR No. 190

Sampling, Substantive test, Dollar-unit sampling, Auditing

Frank H. Selto, Hugh D. Grove, The Predictive Power of Voting Power Indices: FASB Voting on Statements of Financial Accounting Standards Nos. 45-69, Journal of Accounting Research, Vol. 21, No. 2 (Autumn, 1983), pp. 619-622

Management control system, Agency model, Private information

Communication, Agency model, Contracting, Communication

Accounting performance measures, Task Uncertainty, Dysfunctional behavior

Auditing, Materiality, Auditor Judgement, Audit quality

Gregory Waymire, Grace Pownall, Some Evidence on Potential Effects of Contemporaneous Earnings Disclosures in Tests of Capital Market Effects Associated with FASB Exposure Draft No. 19, Journal of Accounting Research, Vol. 21, No. 2 (Autumn, 1983), pp. 629-643

Indexing historical cost accounting to has received considerable attention in the accounting literature. From a tax perspective, it is often argued that with historical cost accounting, increases effective corporate tax rates, ceteris paribus. (See Davidson and Weil [1978], Williams [1979], Bernard [1981], and Gonedes [1981].)1 A major reason is the failure of historical cost accounting to index the depreciation tax shield to inflation. But explicit indexation may not be necessary to achieve all the effects of indexation. The same effects can be attained, at least with respect to expected rates of inflation, if nominal interest rates incorporate unbiased forecasts of rates of inflation (Gonedes [1981, p. 247]).2 Davidson and Weil [1976] note that price-level adjusting the tax system would increase the depreciation tax shield, but it ... would diminish the tax-saving attribute of debt financing in a period of rising prices [1976, p. 99].

Inventory valuation, LIFO, FIFO, Inventory costing