Knowledge that Transforms

This study employs the conceptual framework of Brunswik's Lens Model to relate empirically actuaries' perceptions of the exposure of an accounting firm to litigation and five conditions common to audit engagements. The five variables studied are the client's financial condition, the client's size, the accounting firm's size, the accounting firm's policy concerning auditor rotation, and the relative amount of write-up work done by the accounting firm. Unequivocal consensus concerning the impact of the variables on the risk of lawsuit occurs only with respect to increased risk for clients with weak financial conditions. However, considerable evidential support suggests a positive relationship between increased risk and the size of the accounting firm and the client. Auditor rotation and the relative amount of write-up work, however, do not exhibit significant impacts on the actuaries' perceptions regarding changes in the risk of lawsuit.

In the April 1975 issue of "The Accounting Review," an article reported the results of an empirical study in there was an attempt to, assess the relative effect which the successful efforts (SE) vs. full cost (FC) method of accounting for exploration costs has on various accounting variables of firms in the extractive petroleum industry and compare the market response to the different accounting numbers generated under these alternative accounting procedures. The objectives of the present paper are to point out certain conceptual ambiguities and logical inconsistencies in the article's analysis, identify several important factors which the article failed to consider in its research design and demonstrate by way of additional research how these factors may have affected the results. In summary, it is believed that empirical evidence with respect to the price effects of the FC vs. SE choice is extremely important and timely given that both the SEC and the FASB currently are considering the subject of accounting in the extractive industries.

Reviews the book "Retail Accounting and Financial Control," 4th ed., by Louis C. Moscarello, Francis C. Grau and Roy C. Chapman.

Reviews the book "Advanced Accounting," 3rd ed., by Charles H. Griffin, Thomas H. Williams and Kermit D. Larson.

Reviews the book "Financial Accounting: Concepts, Uses and Problems," by Howard J. Snavely, Jerome J. Kesselman and Wayne A. Label.

Reviews the book "European Financial Reporting 3: Italy," by M.I. Stillwell.

Reviews the book "Statistical Cost Estimation," by Joel Dean.

Reviews the book "Budgets: An Analytical and Procedural Handbook for Government and Nonprofit Organizations," by Michael Babunakis.

A theoretical framework is presented that decomposes educational evaluation into four functional types. The framework is used to (1) examine the evaluation function of learning activities typically found in undergraduate accounting courses and (2) to investigate the behavioral justification for the use of some learning activities in evaluation of student performance. The analysis provides accounting educators with insights into the role of learning activities in evaluating student performance. Educators stand to attain a better understanding of the strengths and weaknesses of their evaluation practices, the rationale for such practices, and the ways in which evaluation practices can be extended and improved.

Reviews the book "Financial Reporting in Japan," by Robert J. Ballon, Iwao Tomita and Hajime Usami.