[According to the principle of user primacy, the interests of users of financial reports take priority over the interests of preparers of financial reports. When applied to the activities of a standard setter for corporate financial reporting, user primacy is a constitutional claim, stating a general principle for the resolution of conflicts. It is controversial, because it is incompatible with views that standard setting is a collective choice process, where the interests (preferences) of all parties are to count equally. An analysis of the logical foundations of the principle is provided, based on recent work in ethics and social and political philosophy. User primacy is a distributional principle governing the relationship between users and managers. A theoretical framework for the rational choice of a distributional principle governing the disclosure of information in the securities market is provided. The conditions under which a securities market-which includes in its basic structure a standard setter to implement the user primacy principle-would be chosen by rational, disinterested securities market agents are analyzed. A standard setter would be established to enforce user primacy, thereby redressing an imbalance between investors (users) and managers. By acting in accordance with this principle, the standard setter aids all securities market agents in exploiting the potential trading gains provided by such a market. At the same time, investors are protected from possible losses arising from the basic relationship between them and managers of widely held corporations. The analysis is applied to two versions of the user primacy principle prominent in the professional standard-setting literature. Although the analysis is not intended to advocate user primacy, a clear and complete statement of the principle is proposed as a guide to standard-setting bodies.]

Abstract ABSTRACT: According to the principle of user primacy, the interests of users of financial reports take priority over the interests of preparers of financial reports. When applied to the activities of a standard setter for corporate financial reporting, user primacy is a constitutional claim, stating a general principle for the resolution of conflicts. It is controversial, because it is incompatible with views that standard setting is a collective choice process, where the interests (preferences) of all parties are to count equally. An analysis of the logical foundations of the principle is provided, based on recent work in ethics and social and political philosophy. User primacy is a distributional principle governing the relationship between users and managers. A theoretical framework for the rational choice of a distributional principle governing the disclosure of information in the securities market is provided. The conditions under which a securities market--which includes in its basic structure a standard setter to implement the user primacy principle--would be chosen by rational, disinterested securities market agents are analyzed. A standard setter would be established to enforce user primacy, thereby redressing an imbalance between investors (users) and managers. By acting in accordance with this principle, the standard setter aids all securities market agents in exploiting the potential trading gains provided by such a market. At the same time, investors are protected from possible losses arising from the basic relationship between them and managers of widely held corporations. The analysis is applied to two versions of the user primacy principle prominent in the professional standard-setting literature. Although the analysis is not intended to advocate user primacy, a clear and complete statement of the principle is proposed as a guide to...

Abstract ABSTRACT: The sales activity variance as well as the corresponding production variance are typically partitioned into a yield variance and a mix variance. These latter variances have a defect which can lead to dysfunctional decisions. Since these variances are based on an average unit price which varies with respect to the unit of measurement selected, the same real events can appear as positive or negative variances. Alternative variances for mix and yield which do not have the above defect are suggested, based on expressing the units of goods sold by their cost of production.

[The sales activity variance as well as the corresponding production variance are typically partitioned into a yield variance and a mix variance. These latter variances have a defect which can lead to dysfunctional decisions. Since these variances are based on an average unit price which varies with respect to the unit of measurement selected, the same real events can appear as positive or negative variances. Alternative variances for mix and yield which do not have the above defect are suggested, based on expressing the units of goods sold by their cost of production.]

Abstract ABSTRACT: The objective of this study is to examine how certain contextual factors in auditor-client conflicts affect the perceived ability of auditors to resist client pressure. A review of the literature resulted in the identification of four factors hypothesized to affect sophisticated financial statement users' perceptions of audit conflict outcomes: nature of conflict issue, client's financial condition, provision of MAS by the audit firm, and the degree of competition in the audit services market. A full-factorial, repeated measures ANOVA experiment was conducted using senior loan officers as subjects. The results indicate that a client in good financial condition is perceived as being more likely to obtain its preferred outcome to an audit conflict than a client in poor financial condition. Clients are also viewed as being more likely to obtain their preferred resolution to a conflict when the conflict issue is not dealt with precisely by the technical standards.

[The objective of this study is to examine how certain contextual factors in auditor-client conflicts affect the perceived ability of auditors to resist client pressure. A review of the literature resulted in the identification of four factors hypothesized to affect sophisticated financial statement users' perceptions of audit conflict outcomes: nature of conflict issue, client's financial condition, provision of MAS by the audit firm, and the degree of competition in the audit services market. A full-factorial, repeated measures ANOVA experiment was conducted using senior loan officers as subjects. The results indicate that a client in good financial condition is perceived as being more likely to obtain its preferred outcome to an audit conflict than a client in poor financial condition. Clients are also viewed as being more likely to obtain their preferred resolution to a conflict when the conflict issue is not dealt with precisely by the technical standards.]

Abstract The foundations are being put in place for a revolution in the science of organizations. Some major analytical building blocks for the development of a theory of organizations are outlined and discussed in this paper. This development of organization theory will be hastened by increased understanding of the importance of the choice of definitions, tautologies, analytical techniques, and types of evidence. The two literatures of agency theory are briefly discussed in light of these issues. Because accounting is an integral part of the structure of every organization, the development of a theory of organizations will be closely associated with the development of a theory of accounting. This theory will explain why organizations take the form they do, why they behave as they do, and why accounting practices take the form they do. Because such positive theories as these are required for purposeful decision making, their development will provide a better scientific basis for the decisions of managers, standard-setting boards, and government regulatory bodies.

Abstract ABSTRACT: In 1974, the AAA Committee on the Relationship of Behavioral Science and Accounting called for the development of teaching methods that enabled students to experience behavioral aspects of accounting. This article suggests behavioral accounting research as an important source for the development of such teaching methods. As an example, a behavioral decision simulation adapted from prior research is described, The simulation enables the student to experience the information evaluation method and enables him to contrast his subjective evaluation process with the evaluation process prescribed by a normative model. The article illustrates how this contrast can serve as a basis for classroom discussion of human information processing issues in accounting.

Abstract ABSTRACT: Two graphs are constructed to show (1) the effects of sales level changes on absorption costing income (at any specified production volume) and, (2) the effects of production volume changes on absorption costing income (at any specified sales level). Each construction is based on a graph of direct costing income with the result that a useful picture of the relationship between direct and absorption costing income is obtained.

Abstract ABSTRACT: Few of the reported studies of innovative techniques for accounting education have found significant improvements in students' performance and attitude. This paper reports on an experimental study in an elementary managerial accounting class using an innovative teaching methodology, The Personalized System of Instruction (PSI). The PSI teaching method was selected for testing because studies in other academic disciplines had found that PSI classes performed better and had better attitudes than traditional lecture/discussion classes. The present study found significantly better performance and attitudes in PSI taught sections of an elementary managerial accounting class. The study also found a higher course drop-out rate for the PSI taught sections.