Abstract This article presents a study on the overhead allocation with imperfect markets and nonlinear technology in accounting in the U.S. The overhead costs generated by the traditional historical-cost-based accounting system are used for pricing usage of scarce resources. These costs must be below or at most equal to the marginal value of such resources as determined by the dual variables of the programming model. It is natural to object to the proposed method since we have a specific management decision model which generates valuations for scarce resources.

Abstract This article presents a study on a cooperative formulation of the audit choice problem in auditing in the U.S. Under appropriate conditions, this leads to group level surrogate utility and probability functions such that the audit program chosen should maximize expected surrogate utility. Thus, the auditing problem is conceptually reduced to a Bayesian decision problem. The normative utility function, however, is determined by summing the auditee's and auditor's respective risk tolerances; and the probability function is determined by sampling both individuals' opinions in proportion to their marginal stake in the choice consequence. That is, the appropriate functions are composites and are not, in the general case, those of the auditors.

Abstract This article focuses on how a constantly evolving procedure in the field of accounting is the presentation, calculation, and meaning of earnings per share (EPS). This evolution has caused most textbook material to become quickly dated and incomplete. The purpose of this article is to present a short example for classroom use that illustrates the current reporting requirements for the presentation of earnings per share data. The reporting of earnings per share on all outstanding shares of common stock has been a practice of many firms for many years. Traditionally, the EPS figure was included only as supplemental information in annual reports. However, this practice has undergone rapid evolution in recent years. In 1966, in its Opinion Number 9, the Accounting Principles Board (APB) strongly recommended that earnings per share data be presented on the face of the income statement. APB Opinion Number 15, issued in May 1969, changed this recommendation to a requirement, thus bringing EPS under the scope of the auditor's report.