Reviews the book "Behavioral Experiments in Accounting II," edited by Thomas J. Burns.

The article discusses the proper method of disclosing all executory contracts into which a firm has entered. Such contracts, also known as future contractual commitments, are agreements between two or more parties in which no party has yet performed any of the acts required of him by the agreement. In accounting texts such agreements are usually illustrated by purchase commitments or lease agreements, transactions where the single most salient feature is usually considered to be one firm's potential cash obligation. When a firm enters into an agreement to receive service potentials of varying types in return for cash, another must agree to provide the service potentials at some future date in return for the promise to pay. This emphasizes the potential liability of the firm. All executory contractual commitments that are material ought to be disclosed wherever and whenever possible. Contingent assets, like, a significant backlog of unfilled orders, are as important to the shareholders of the firm receiving the order, as the contingent liability is to the investors of the firm ordering them. Both rather than just one facet of the transaction should be disclosed.

Recent researches' have emphasized that accounting exists to communicate in summary form those economic events affecting the reporting unit. Accounting is not an end in itself, but simply a method of bridging the gap between an economic unit, the entity, and some party or parties, either internal or external, who require information about these events. Thus, the utility of an accounting system is not derived from its elegance, but rather from its ability to communicate the relevant data. The idea that accounting is designed to report economic data to those groups desiring it is important for two reasons. First, and more basic, the accounting system ought to be designed to meet the informational needs which led to its creation. Second, the term economic data is used to denote data which are useful in decision-making and for control. The purpose of this paper is therefore, twofold. First is to stress the need for utilizing such an approach in accounting reports. Second, to illustrate how such an approach can be implemented in a specific instance, the presentation of common shareholders' equity on the balance sheet.

The article focuses on some of the most significant problems that have arisen in adapting laboratory experimentation to accounting research. Through the use of such systematic techniques, accountants are attempting to better understand many important problems in any laboratory experiment the selection of subjects is important. Selection of a group of subjects who are for some reason undesirable will invalidate the final results regardless of how elaborate and well conceived the remainder of the experimental design may be. Experience in studies to date suggests that the assumption about population homogeneity can not be made casually. A recent study in this area has shown that, in fact, students and businessmen do react differently to particular laboratory experiments. While a great deal of attention has been devoted to the selection of the proper subjects, not enough emphasis has been placed upon the selection of the experimental environment. It is in this area that accountants doing behavioral research ought to concentrate greater effort.

This article focuses on a study which investigated the implications of behavioral science for managerial accounting. Accountants have been involved with the behavioral dimension of accounting problems for quite some time. The management information system of any firm is not solely a technical communication system, one designed only to permit data to flow from one point in the system (i.e., the firm) to another. Very little research has been done on the form of the relationships between the organization and the individual and its implication for accounting data. A more decentralized form of organization would, he conjectured, ease many of the accounting problems by refocusing the attention of supervisors to other, less arbitrary sets of data. The study of management control systems has progressed in three areas: the problems in standard setting, the impact of the audit function, and the reporting of relevant data.

Reviews accounting books by Ahmed Belkaoui. `Behavioral Accounting'; `Human Information Processing in Accounting'; `The Coming Crisis in Accounting.'

Reviews the book "Behavioral Science: Concepts and Management Application," by Harold M. F. Rush.

Reviews the book "Organizational Decision Making," by Marcus Alexis and Charles Z. Wilson.

Reviews the book "Managerial Economics and Operations Research," edited by Edwin Mansfield.

Reviews the book "Management Uses of Accounting," by Wilber C. Haseman.