Knowledge that Transforms

Abstract Reviews the book "Alexander Hamilton Church: A Man of Ideas for All Seasons," by Richard Vangermeersch.

Abstract Reviews the book "The Social Software of Accounting and Information Systems," by Norman B. Macintosh.

Abstract ABSTRACT: The degree to which earnings changes are thought to be permanent may determine the magnitude of the security price response to a given earnings announcement [Brown et al., 1985; Kormendi and Lipe, 1987; and Easton and Zmijewski, 1987]. This study extends this literature by examining the impact on stock prices of quarter ahead and year ahead forecast revisions, as well as forecast errors. Results indicate that analysts' forecast revisions provide significant incremental explanatory power in a pooled time-series, cross-sectional regression of abnormal returns on forecast errors and analyst forecast revisions, in addition, the fourth quarter announcement appears to provide more information to analysts and investors than interim announcements.

Abstract Reviews the book "The FASB: The People, the Process, and the Politics," by Paul B. W. Miller and Rodney J. Redding.

Abstract ABSTRACT: This paper provides an analysis of the association between the accounting gain produced by an equity-for-debt swap and executive compensation, Our results suggest that the executives of firms completing a swap transaction experience an Increase in cash compensation (salary plus bonus). The increase is largest both in absolute magnitude and in statistical significance for firms whose compensation plans are more "accounting-oriented" (i.e., firms whose executives would be expected to experience the greatest Increase in compensation under the hypothesis that firm's compensation plan is not adjusted for the accounting gain produced by the swap), We also find that, on average, the value of the executives' personal equity holdings decreases in the period surrounding the announcement of the swap. The magnitude of this decrease is, on average, comparable in size to the increase in their compensation. However, there is some weak evidence that executives of firms whose compensation plans are more "accounting-oriented" experience a statistically significant increase in their total wealth (i.e., the sum of excess compensation and the value of personal equity holdings) as a result of the swap transaction.

Abstract Reviews the book "Introducción a la Contabilidad Internacional," by Jose Antonio Gonzalo Angulo and Jorge Tua Pereda.

Abstract Reviews the book "Cost Management for Today's Advanced Manufacturing," edited by Callie Berliner and James A. Brimson.

Abstract ABSTRACT: This paper extends accounting choice research to the software industry. Because firms in this previously unexplored industry are small, the research provides Insight into determinants of accounting choices of small firms. Hypotheses about the effects of firm size and auditor preference on SFAS No. 86 adoption decisions are developed and tested. The results Indicate that early adoption decisions are strongly associated with firms having small size and auditors who expressed support for SFAS No. 86 while it was in the exposure draft stage.

Abstract Reviews the book "Issues in Multinational Accounting," by Christopher W. Nobes and Robert H. Parker.

Abstract Reviews the book "The Rise of Statistical Thinking: 1820-1900," by Theodore M. Porter.