Knowledge that Transforms

Reviews the book "Information Systems: Theory and Practice," 2nd ed., by John G. Burch, Felix R. Strater and Gary Grudnitski.

ABSTRACT: Choices of accounting techniques, as well as evaluations of accounting numbers, are based in part upon a knowledge of the relative profit patterns associated with alternative techniques. It is generally understood that inflation accounting models change profit patterns, and the general effects of changes from historical cost accounting to various inflation accounting models have been analyzed. In addition to these general effects, however, there are specific effects due to the interactions of conventional accounting techniques (such as LIFO and FIFO) and specific inflation accounting models. This study analyzes the interaction effects of conventional inventory accounting methods and several inflation accounting models to demonstrate that these effects can produce significant and non-intuitive changes in relative profit patterns among alternative accounting techniques.

ABSTRACT: This study attempts to determine if the language of Form 10-K, the press release, and the annual report were consistent in reporting year-end results. A general semantics model was used to analyze linguistic qualities such as completeness, qualification, facts versus generalizations, appositives and references versus evaluations, signal, and propagandistic words. The Form 10-K and the press release sections were not significantly different when describing the same topics. The language of the annual report was significantly different from both Form 10-K and the press release. The results suggest that when describing the same topics, the language of the press release may be more similar to Form 10-K than may have been assumed by professional and governmental groups. Other reporting elements such as format requirements may play a greater role in influencing the perception of readability of disclosure documents than may have been commonly assumed. The press release may be more useful in providing 10-K topics which not only are more timely but also are consistent with the 10-K in the qualities of language employed.

Reviews the book "Accounting for Oil and Gas Producing Companies," Part 1, "Exploration, Acquisition, Development, and Production," by Horace R. Brock, John P. Kungstedt. and Donald M. Jones.

Reviews the book "Théorie Comptable,"by Ahmed Belkaoui.

Reviews the book "Handbook of Budgeting," edited by H.W. Allen Sweeny and Robert Rachlin.

Reviews the book "International Accounting and Multinational Enterprises," by Jeffrey S. Arpan and Lee H. Radebaugh.

ABSTRACT: Given the recent history of double-digit inflation, there is an increased need for manufacturing firms to respond to possible changes in the relative prices of their inputs. The paper presents a method for such firms to adapt more quickly to changes in relative prices by assigning the responsibility solely to cost center managers. The basic approach is to measure their performance with respect to both the adaptation to relative input prices and the technical efficiency of the operation. An illustration of this new approach to production processes adequately described by a linear programming formulation is also presented.

ABSTRACT: This paper reports an empirical study of 281 errors requiring financial statement adjustments on 152 audits. It reports, among other things, the audit areas in which the errors occurred, the audit procedure, circumstance or other event that initially signaled that an error had occurred, and the apparent causes of the errors, including whether they appeared to have been caused intentionally or unintentionally. The results suggest that client personnel problems, such as inexperience and insufficient knowledge of accounting, and cut-off or accrual problems, are important causes of errors. The results also suggest that analytical review procedures and discussions with the client signal a large proportion of errors. Various other results are presented, and some potential implications for audit planning are discussed.