Abstract. This article reviews John Butterworth's significant contributions to the accounting and information economics literature. Some of the reviewed work is unpublished and is first exposed in this paper. I describe the general nature of John's diversified contributions and focus on some theoretical components of his work. Résumé. Cet article fait la revue des contributions importantes de John Butterworth à la littérature dans les domaines de la comptabilité et des systèmes d'information. Certains des travaux révisés n'ont pas été publiés et sont dévoilés pour la première fois dans cet exposé. Je décris de façon générale les contributions diversifiées de John en me concentrant sur quelques‐unes des composantes théoriques de ses travaux.

Business failure, Forecasting, Bankruptcy, Historical data

Accounting Research Methodology, Event studies, Wall Street Journal, Event dates

Empirical studies of the behavior of stock returns are important for several reasons. First, the nature of stock return behavior is fundamental to the formulation of the concept of “risk” (or “uncertainty”) in various financial theories and models. Second, the measurement of risk depends heavily on properties (such as the stationarity, long-tailedness, finiteness of the second and higher moments, etc.) of empirical stock return distributions. Third, various tests for the empirical validity of financial models [28] and the applications of these models (e.g., to the evaluation of investment performances [21], [22]) rely to a considerable extent on the steadiness over time of stock return distributions and the constancy of systematic risk. Fourth, several important pricing models for stock options, warrants, convertible debentures, and other similar financial instruments usually require explicit estimates of stock return variances [5]; the usefulness of such models depends largely on the adequacy (e.g., the finiteness, accuracy, etc.) and the stationarity of the variance measurements.

This paper demonstrates that if both firms and workers search the other side of the market for job matches the equilibrium rate of unemployment is likely to be too high. Both sides ignore a positive externality of their search: when they establish a job match they remove from the market a job searcher, so they save society his search costs. I show that there is no feasible wage rate that can internalize this externality under fairly weak restrictions on the technology of search.

Earnings announcements, Disclosures, Timeliness, Stock price reaction

Management forecasts, Auditing, Loan decisions, Audited management forecasts

Keith A. Houghton, Ratna Sengupta, The Effect of Prior Probability Disclosure and Information Set Construction on Bankers' Ability to Predict Failure, Journal of Accounting Research, Vol. 22, No. 2 (Autumn, 1984), pp. 768-775