Comments on an article by M.C. Wells which defended the need for a priori research in accounting using Kuhn's theory of the course of scientific progress. Errors in Wells' arguments.
The primary purpose of this paper is to report on recent pedagogical applications of the LEXIS document retrieval system at the University of Michigan. A general description of LEXIS and its installation at Michigan is provided, together with a discussion of its use in specific financial accounting and tax accounting classes. The paper concludes with some observations on future classroom use of the system.
[This paper builds on the results of prior research on the structure of the U.S. market for audit services. Two complementary empirical approaches are pursued. First, inferences are made about specific aggregate Big Eight comparative advantages from an analysis of auditor selections by 299 sample firms from 1964 to 1980. Second, dynamic trends within the Big Eight are considered by examining changes in individual audit firm market shares across extensive client samples at four points in time-1950, 1960, 1970, and 1980. In general, analysis of auditor change data indicates no substantial upward shift in aggregate Big Eight "equilibrium" market share in the two decades studied. Rather, it would appear that movements in this time-frame to the Big Eight reflect a long process of adjustment to relatively stable conditions of comparative advantage. Changes in within Big Eight market shares, on the other hand, strongly support the notion of increasing intra-Big Eight competition for nonregulated clients.]
This paper builds on the results of prior research on the structure of the U.S. market for audit services. Two complementary empirical approaches are pursued. First, inferences are made about specific aggregate Big Eight comparative advantages from an analysis of auditor selections by 299 sample firms from 1964 to 1980. Second, dynamic trends within the Big Eight are considered by examining changes in individual audit firm market shares across extensive client samples at four points in time--1950, 1960, 1970, and 1980. In general, analysis Of auditor change data indicates no substantial upward shift in aggregate Big Eight "equilibrium" market share in the two decades studied. Rather, it would appear that movements in this time-frame to, the Big Eight reflect a long process of adjustment to relatively stable conditions of comparative advantage. Changes in within Big Eight market shares, on the other hand, strongly support the not]on of increasing intra-Big Eight competition for nonregulated clients.
This paper reports the results of the experimental stage of a three-stage project which explores many aspects of auditors' involvement in their clients' financial forecasts. The experimental instruments include forecasting factors which were considered important by auditors and which closely paralleled two quite distinguishable corporate settings. Analysis of auditor judgments of the reasonableness of forecasts based on these corporate settings provides evidence which is consistent with the following general conclusions: 1. Models representing individual reasonableness judgments concerning the two cases were relatively well specified 2. The track records of management in forecasting accuracy for net income and sales were the most significant factors in the individual judgment models; and 3. Based on the judgment models employed in the analysis of the experiment, subjects' judgments appeared to be affected by differences in the background information in the two corporate cases.
This study is both a replication and an extension of prior work on auditor concentration in specific industries. By expanding the client population sevenfold, more comprehensive measurement of concentration is obtained than was possible in previous research. Prior studies' conclusions concerning the variability of auditor concentration across industries are supported, but the levels of concentration appear to be lower when a surrogate for audit fees is employed as the measure of CPA-firm activity levels. An important finding is that concentration measures are quite sensitive to the CPA-firm activity measure employed. A model is posited for explaining the level of auditor concentration in any given industry. The model states that auditor concentration is a positive function of the degree of client-industry regulation and capital market activity. Tests of this model across 54 industries indicate statistically significant positive associations between the two proposed explanatory variables, and the level of CPA-firm concentration.
This paper describes the results of a survey of accounting educators as to their awareness, access to and usage of the LEXIS document retrieval system. A majority of the respondents have a general familiarity with the system, but access and use are quite limited. Accounting educators currently utilize LEXIS more as an occasional research source than for either course development or "hands-on" student use.
[Bond raters are unique in their exposure to management forecasts. They regularly review ratees' confidential forecasts for new and ongoing bond issues. This study gives evidence that bond raters have developed great sensitivity to subtle differences in forecasts-supporting the inferences that forecasts are used in the rating process and that the rating environment fosters expertise development. In experiments which measured responses to confirming and disconfirming evidence (in the form of various forecast trends), bond raters changed their evaluations of ratees when forecast data were introduced. These results are consistent with bond raters having developed sharply defined knowledge structures (schemata) through their information exposure, feedback, and reward systems. In addition, bond raters demonstrated the other expertise attributes of high levels of consensus and confidence.]
Bond raters are unique in their exposure to management forecasts. They regularly review ratees' confidential forecasts for new and ongoing bond issues. This study gives evidence that bond raters have developed great sensitivity to subtle differences in forecasts-supporting the inferences that forecasts are used in the rating process and that the rating environment fosters expertise development. In experiments which measured responses to confirming and disconfirming evidence (in the form of various forecast trends), bond raters changed their evaluations of ratees when forecast data were introduced. These results are consistent with bond raters having developed sharply defined knowledge structures (schemata) through their information exposure, feedback, and reward systems. In addition, bond raters demonstrated the other expertise attributes of high levels of consensus and confidence.