Financial reporting, Confidence interval statements, Disclosures, Uncertainty

Abstract Confidence interval financial statements have been suggested as a means to convey the uncertainty surrounding the items on the financial statements. Albrecht [1976] provided a conceptual framework within which the uncertainty of income statement items can be computed and then illustrated the degree of uncertainty that existed in one firm's earnings computations. This article further develops Albrecht's conceptual framework by discussing types of accounting error, the methods of quantifying accounting error, the period(s) used to derive the distribution on accounting error and the level of aggregation at which accounting error is quantified.

Abstract ABSTRACT: This article describes the results obtained when an admission test was developed and used at Northern Illinois University as an accept-reject device for our first intermediate accounting course. The results indicate that it is possible to develop an admission test, that the test need not be lengthy, and that acceptable levels of correlation exist between the admission test scores and success or failure in the first intermediate accounting course.