[The sales activity variance as well as the corresponding production variance are typically partitioned into a yield variance and a mix variance. These latter variances have a defect which can lead to dysfunctional decisions. Since these variances are based on an average unit price which varies with respect to the unit of measurement selected, the same real events can appear as positive or negative variances. Alternative variances for mix and yield which do not have the above defect are suggested, based on expressing the units of goods sold by their cost of production.]
[This study investigates the role of productive thinking in affecting student attitudes toward, and performance with, microcomputer spreadsheet programs in a managerial/cost accounting course. Productive thinking is defined as thinking based on an understanding of the nature of problems rather than on memorization of facts and rules. In this experiment covering two academic quarters, students initially indicated strong desire to use microcomputers, but their enthusiasm diminished after the classroom experience with their use. Although there was no performance difference across integrative versus non-integrative assignments, performance was positively related to previous computing experience. Students did feel, however, that computers should be used in other accounting courses. Students also reported that they experienced greater learning with integrative course assignments than with repetitive, non-integrative assignments. This finding suggests that a benefit of computer use in teaching accounting may be the opportunity it offers for problem solving based on understanding rather than on memorization.]
[Test results are presented on the relative performance of two new auditing procedures for dollar-unit sampling-the quasi-Bayesian method developed by McCray [1984] and a slightly modified version of the moment method developed by Dworin and Grimlund [1984]. Extensive simulation studies of 96 representative accounts receivable and inventory populations were conducted. Both methods were found to be reliable over the tested range, and both provided tighter confidence bounds than those provided by the Stringer bound. This is the first study that has been made of the reliability of the quasi-Bayesian bound and of the comparative performance of the quasi-Bayesian and the moment methods. The moment method provided a tighter confidence bound at low error rates. For populations with high error rates, for which the true mean error was either very nearly zero or very large, the quasi-Bayesian method provided a tighter bound. Both bounds provided comparable results for the remaining intermediate cases. While either can be successfully used in these cases, the moment method appears to be easier to implement on currently available personal computers.]
[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 examines the hypothesis that managers reduce reported earnings during labor union contract negotiations relative to earnings released before and after contracts are negotiated. Analyzing earnings around labor negotiations provides evidence regarding when managers manipulate accounting earnings and, hence, information regarding the costs and benefits of managing earnings. We find no evidence of lower than expected earnings during negotiations. Time series of quarterly and annual unexpected earnings, using several measures of expected earnings, are examined around labor talks for a sample of 105 unionized companies over the period 1968-1981. Both random and matched samples of firms not engaged in labor negotiations also are chosen. The time series of earnings during labor talks for the unionized sample is indistinguishable from that of the random and matched samples. An analysis of these firms' quarterly earnings time-series properties and their abnormal stock returns suggests that in this sample period unionized firms had less incentive to reduce earnings because they already were performing poorly.]
[This paper discusses an approach to introducing empirical accounting research design to Ph.D. students. The approach includes a framework for evaluating accounting experiments as well as studies based on passive observation of subjects or data. Alternative methods of isolating the effect of the "independent" variable of interest from effects of prior-to-the-study-period variables and contemporaneous variables are discussed along with the advantages and limitations of each method. Also discussed is the relationship between type I and type II error risks, sample size, and research design. The importance of research design, including theory development and means for mitigating the effects of extraneous variables, is emphasized as perhaps the only practical way to achieve research objectives in empirical research in accounting.]
[This paper examines the effect of structural decentralization, perceived environmental uncertainty, and organizational interdependence on Management Accounting Systems [MAS] design. MAS design was defined in terms of the perceived usefulness of several information characteristics which may be associated with an MAS. These characteristics were scope, timeliness, level of aggregation, and information which assists integration. In addition to examining the direct effects of contextual variables, the study sought to determine how the independent variables interacted. Hypotheses were generated for both direct and indirect effects of contextual variables and were tested using data collected from 68 managers. The findings indicated that: 1) Decentralization was associated with a preference for aggregated and integrated information; perceived environmental uncertainty with broad scope and timely information; organizational interdependence with broad scope, aggregated, and integrated information. 2) The effects of perceived environmental uncertainty and organizational interdependence were, in part, indirect through their association with decentralization.]
[Previous studies concerning the relative accuracy of management and financial analyst earnings forecasts have produced conflicting conclusions. Resolving this conflicting evidence is important because of the role relative accuracy potentially plays in such issues as the imposition of mandatory management forecast disclosures, the information content of management versus analyst forecast releases, and the motive of management in providing earnings forecasts to the market. Using weekly consensus (mean) financial analyst earnings forecasts, we document a close association between relative forecast accuracy and the timing of the release of the forecasts. We find that management forecasts issued subsequently to, coincidentally with, and up to four weeks prior to analyst forecasts are significantly more accurate than the analysts' estimates. The consensus analyst forecasts are more accurate beginning the ninth week after the release of the management forecast. Thus, by more closely controlling for the timing of the analysts' forecasts, we are able to provide a more precise picture of the dynamic nature of relative forecast accuracy.]
[Building upon the author's earlier work [1982], which demonstrated that double-entry bookkeeping is not an absolute system defying extensions but is logically extendible to triple-entry bookkeeping, this paper develops a framework for a triple-entry bookkeeping system and illustrates it by means of a simple example which includes a worksheet, journal entries, and three basic financial statements-wealth statement, momentum statement, and force statement. While the earlier work extended the existing two dimensions of bookkeeping (wealth and income) into a third dimension under the same measurement unit, namely dollars, this present paper introduces "momentum accounting" under a related but different measurement unit, namely dollars per time period, such as a month, in such a way that, when mathematically integrated over time, momentum accounting articulates with wealth accounting in every dimension. Dealing with earnings rates per time period associated with assets and liabilities, momentum accounting accounts for earnings rates and their changes. Finally, "force accounting" is introduced as the third layer of the accounting system to explain factors that are judged to be responsible for changes in the earnings rate. Its measurement (dollars per month per month, for example) is induced by the measurement in momentum accounting, which in turn is induced by the measurement in wealth accounting. In this way, the extension of double-entry bookkeeping is carried out under a disciplined framework of measurements, which hopefully will direct management's attention and sensitivity to factors at a level deeper than the level of wealth and income that has been traditionally dealt with by double-entry bookkeeping.]
[This study empirically examines whether pension fund assets and liabilities associated with corporate-sponsored defined benefit pension plans are valued by the securities markets as corporate assets and liabilities. An equity valuation model based on the balance sheet identity is used to permit pension and non-pension assets and liabilities to have separate empirical coefficient values. This study differs from earlier ones [Feldstein and Seligman, 1981; Feldstein and Morck, 1982; and Daley, 1982, 1984] which examine how share prices are affected by the net pension liability in the context of the Litzenberger and Rao [1971] equity valuation model. Using theoretical benchmark coefficient values for pension assets and liabilities based on the Miller [1977] model of capital market equilibrium, this study finds evidence consistent with the notion that pension fund property rights-ownership of pension assets and liabilities-lie fully with the firm. Several empirical extensions are explored to examine whether the basic finding can be made more robust.]