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On the Usefulness of Financial Statement Information: A Suggested Research Approach.

Lyn D. Pankoff; Robert L. Virgil
The Accounting Review 1970 45(2), 269-279
Abstract The article discusses the information content of financial statements that firms periodically release to the public. It tends to answer what kinds of information would a publicly owned firm disclose about its operations. Increasingly within about the past decade, accountants have come to believe that an important part of the answer to this question lies with the user of financial statements. It lies in knowing what kinds of information about firms are most useful to him. The recognition of the user's importance in the definition of usefulness has led to a number of important empirical measurements of usefulness. Specifically, the article wants to discover the relative value to a prominent user, the investor, of the various kinds of routinely calculated financial statement numbers, such as sales and net income, relative to each other and to some other kinds of quantitative information. It discusses these calculations, with the timeliness of reports or the appropriate media for transmission.

The Role of Accounting Training in Top Management Decision Making.

Francis E. Dalton; John B. Miner
The Accounting Review 1970 45(1), 134-139
Abstract Accounting professors, and a number of other business administration professors as well, have argued that a solid background in accounting is necessary for effective corporate decision making. By implication and on occasion explicitly, they indicate that top management would be more successful and produce higher profits, if men with considerable accounting training were more numerous at the very highest levels. This article reports on several studies that investigate this hypothesis. The medium of investigation is a simulation of top management decision-making in manufacturing industry. That accounting training is not an essential factor in management success, at least within the manufacturing sector, seems inescapable. Prior research has indicated that intelligence may be a factor in game performance; steps were taken to ensure that differences on this factor could not influence the results. Thus, as with homogeneity of major, the objective was to eliminate a possible contaminating variable which might become confounded with the experimental variable accounting training and make unambiguous interpretation of results impossible.

Behavioral Hypotheses of Internal Control.

D. R. Carmichael
The Accounting Review 1970 45(2), 235-245
Abstract This paper develops the behavioral hypotheses which underly the design, operation, and audit of internal control systems. The traditional conception of the organizational setting of the internal control system in accounting literature resembles very closely what organization theorists have referred to as the formal organization. When the traditional behavioral hypotheses are examined in the light of current thinking in organization theory, however, some doubt is cast on the validity of the traditional hypotheses. Although the traditional hypotheses are not conclusively invalidated in this paper, enough doubt should exist to stimulate formulation of hypotheses more in agreement with organizational reality.