The article reviews the book "Managerial Cost Analysis," by James M. Fremgen.

Abstract The objectives of this article are to supply a specific study, and to try to show some of the hazards that must be risked by any one attempting to define accounting principles logically. For many years accountants have sought to discover and state the principles on which the practice of their profession should be based. The latest such effort which is reasonably complete is accounting research study (ARS), "A Tentative Set of Broad Accounting Principles for Business Enterprises," by Robert T. Sprouse and Maurice Moonitz. Traditionally, the accounting profession has regarded economic theory as too subjective to apply to real situations in accounting. This judgment should not be extended to include ARS, which may be regarded as an attempt to reconcile accounting practice with an internally consistent theory of income determination. Although economists often construct different definitions of income to serve the requirements of the problem with which they are dealing, the most widely quoted one would define business income as the amount which could be distributed to the business' owners at the end of a period while permitting the business after the distribution to remain in the same condition as at the beginning of the period, with equivalent expectations.

J. Bradford De Long, Lawrence H. Summers; Equipment Investment and Economic Growth: Reply, The Quarterly Journal of Economics, Volume 109, Issue 3, 1 August 199

Abstract There has been a great deal of interest expressed in the development of accounting curricula for students wishing to pursue a career in management accounting, as of April 1975. At University of Texas in Austin, Texas, it was felt that practitioners in the management accounting field should be consulted to determine their perceptions of the usefulness of various management accounting topics in their work experiences. A group of faculty met to consider what topics should be included in such a survey. A list of thirty-nine topics was chosen from consulting the indexes and table of contents in several managerial and cost accounting texts, as well as from discussion with a small group of management accounting practitioners. An analysis of the results of the survey indicated there were five major rank-order groups of topics, namely, performance evaluation, responsibility accounting, internal control, tax factors in business decisions and profit planning and control. These groups were determined by searching for gaps between topics in the scale-weighted averages.

Olivier J. Blanchard, Eric S. Maskin, Lawrence H. Summers; Manifesto, The Quarterly Journal of Economics, Volume 100, Issue 1, 1 February 1985, Pages iii,

Should managers, when taking investment decisions, follow the signals given by the stock market even when those do not coincide with their own assessment of fundamentals? Do they? In this paper we review theoretical arguments and examine the empirical evidence. First, we look at the relation between investment, market valuation, and proxies for fundamentals over the last 90 years. Second, we look at the behavior of investment during the episodes associated with the crashes of 1929 and 1987. We find a limited role of market valuation, given fundamentals.

We propose an explanation for the wide variation in rates of taxation across developed economies, based on differences in labor market institutions. In "corporatist" economies, which feature centralized labor markets, taxes on labor input will be less distortionary than when labor supply is determined individually. Since the level of labor supply is set by a small group of decision-makers, these individuals will recognize the linkage between the taxes that workers pay and the benefits that they receive. Labor tax burdens are indeed higher in more corporatist nations, and non-labor taxes are lower, which is consistent with this theory. There is also some evidence that the distortionary effects of labor taxes are lower in more corporatist economies.

The issue of dynamic efficiency is central to analyses of capital accumulation and economic growth. Yet the question of what characteristics should be examined to determine whether actual economies are dynamically efficient is unresolved. This paper develops a criterion for determining whether an economy is dynamically efficient. The criterion, which holds for economies in which technological progress and population growth are stochastic, involves a comparison of the cash flows generated by capital with the level of investment. Its application to the United States economy and the economies of other major OECD nations suggests that they are dynamically efficient.

This study investigates the relationship between insider trading and fraud. We find that in the presence of fraud, insiders reduce their holdings of company stock through high levels of selling activity as measured by either the number of transactions, the number of shares sold, or the dollar amount of shares sold. Moreover, we present evidence that a cascaded logit model, incorporating insider trading variables and firm-specific financial characteristics, differentiates companies with fraud from companies without fraud.