[There are currently no definitive guidelines for reporting the current and noncurrent portions of lease obligations. Two possible approaches to this problem of allocation-the change in present value approach and the present value of the next year's payments approach-have been identified by Swieringa [1984]. This article addresses two aspects of this financial reporting issue. First, evidence is presented to show that the change in present value approach appears to be dominant in current financial reporting practice. Second, it is shown that adjustment of the reported financial statement numbers to those that would be obtained by the present value of the next year's payments approach does not affect the ranking of companies by a number of financial measures. These results suggest that the issuing of guidelines for reporting the current and noncurrent portions of lease obligations by the FASB is not warranted.]

[The study on perceptions of quality of accounting journals by Howard and Nikolai [1983] is extended to include respondents from the U.K., Australia, and New Zealand. There are highly significant correlations between the perceptions of faculty in these three countries. There is also a high correlation with the earlier U.S. study, though the ranking of a few journals is markedly different.]

The annual reports of 141 Fortune 500 Industrial companies were reviewed to determine which financial ratios are reported. The values for 11 selected ratios are computed for all companies using a standardized computational rule. Three of the 11 ratios are significantly more favorable for reporting than for nonreporting firms, suggesting that Fortune 500 firms may selectively report these ratios.

Reviews the book "Accounting for Corporate Income Taxes: Conceptual Considerations and Empirical Analysis," by Thomas H. Beechy.

Reviews the book "Capital Budgeting: Theory, Quantitative Methods, and Applications," by Anthony F. Herbst.

This study explores the linkages among job standard tightness, type of compensation scheme, and performance. It postulates that job standard tightness and type of compensation scheme affect not only workers' effort, but also their self-selection among employment contracts, and through these, job performance. A laboratory experiment yielded the following results: among subjects with assigned treatments, job standard tightness and type of compensation scheme had significant independent, but insignificant interactive effects on performance. Subjects who were permitted to choose their own compensation schemes (given an assigned job standard) self-selected among these by skill. There was also some indication that being able to select one's own compensation scheme, per se, enhanced performance. If supported by future studies, these results suggest that job standards and compensation schemes may affect performance not just by motivating a given set of employees, but also by affecting the type of employees an organization attracts from the labor market.

This study shows that the 1933 and 1934 Securities Acts significantly, and unexpectedly, increased firms' required financial disclosure while curtailing their accounting alternatives. These constraints are postulated to have affected the nature of outstanding bondholder-shareholder contracts and the future costs of entering into such contracts. These changes are hypothesized to have affected bondholder and shareholder wealth through shareholder-to-bondholder wealth transfers, modifying firms' investment, financing, and production opportunity sets, reducing shareholder-bondholder contracting costs, and through wealth transfers across firms. Empirical tests were performed on daily stock and bond returns during the deliberation period of each Act. The sample consisted of New York Stock Exchange stocks and bonds, and over-the-counter stocks. The evidence is consistent with the '33 Act having reduced shareholder wealth through interfirm wealth transfers, out-of-pocket compliance costs, and reduced opportunity sets. The evidence weakly suggests that the '33 Act enhanced bondholder wealth. However, this effect does not appear to have been due to a wealth transfer from shareholders. There is no evidence of a significant effect due to the '34 Act.

The expected value of information is an important concept in cost and managerial accounting. Quite often students have difficulty integrating and applying statistical techniques to accounting problems. Contributing to this difficulty is the occasional lack of standardization of terms in the two disciplines. This article describes an approach which introduces information economics to managerial and cost accounting classes, Included is an Appendix which can serve as the basis for a classroom presentation by the instructor or which can be reproduced and distributed to students.

This study uses an agency theory framework to analyze firms' incentives to hire external auditing. It postulates that a major reason for firms to hire this service is to help control the conflict of interests among firm managers, shareholders, and bond-holders. Firm characteristics which affect the severity of this conflict or the marginal cost of external auditing are expected to influence a firm's demand for this service. Based on this analysis, leverage, firm size, and number of accounting-based debt covenants are predicted to increase the probability that a firm will voluntarily hire external auditing. The firm manager's ownership share is predicted to have the opposite effect. Univariate and multivariate tests were conducted on a sample of 165 NYSE and OTC firms from the year 1926. The results generally supported the hypothesized effects of leverage and accounting-based debt covenants, and moderately supported the predicted role of firm size. Manager ownership effects could not be tested due to data problems.

Previous studies analyzing the publication rates of various accounting faculties concentrated upon only four journals, two of which were primarily academic. This study examines publications in 12 journals, representing the much broader audience addressed by accounting authors. The 25 schools with the largest number of publications are listed both on a total publications basis and on the basis of average output per faculty member. The concentration of effort by some schools on particular segments of the audience is highlighted.