Journal Article A Theory of Saving and Portfolio Selection Get access A. Douglas A. Douglas University of California, Berkeley Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 35, Issue 4, October 1968, Pages 453–463, https://doi.org/10.2307/2296772 Published: 01 October 1968

Abstract This article focuses on the author's views about knowledge of accounting which is needed by a businessmen. The author says that first, a business executive should be sufficiently familiar with the principles of accounting to enable him to appreciate the mutual relations of the important factors in his particular line. Another and all-important exercise of the accounting attitude of mind is needed by the executive in his analysis of the widely differing business conditions which often exist throughout the country. The most definite information on this score can be bad from the traveling salesman, who is usually the best posted man in such matters in his territory. The problem of the executive is then to concentrate his efforts on the section and localities where the going is good, and where business is to be had. On the other hand, he must cut on expenses in the localities where conditions are poor, scrutinize sales and credits and push collections.

Abstract The article suggests an improvement in the accounting field of mix variance. Mix variances arise when factor input combinations of raw materials or grades of labor differ in composition from the standard mix. It is also used to analyze sales or contribution margin when actual mix differs from budgeted mix. The primary intention is to propose a different structure of raw material variances where the standard mix is intentionally abandoned in the short-run due to raw material price changes, causing a different combination to be optimal. Criticism of the mix and yield variances and proposed recasting for the above situation follows the first portion of the paper which is devoted to the planning function. In terms of the planning-performance- control cycle, if output can be attained with different mixes of materials inputs, decisions can be implemented by means of mathematical models such as linear programming. In conclusion, it is apparent that the traditional materials mix and yield variances suffer from an advanced case of technological obsolescence.

Richard A. Ashley, Douglas M. Patterson, A Nonparametric, Distribution-Free Test for Serial Independence in Stock Returns, The Journal of Financial and Quantitative Analysis, Vol. 21, No. 2 (Jun., 1986), pp. 221-227

ABSTRACT The increase in investor diversity over the last 35–40 years prompted us to revisit trading volume reactions to earnings announcements and how these reactions vary with firm size. We argue that this increase in investor diversity would likely increase differences in the precision of pre‐announcement information around earnings announcements, particularly for large firms. This suggests that the role of earnings announcements in resolving investor disagreement, as reflected in trading volume reactions, has increased. Over the 35‐year period 1977–2011, we find a dramatic increase in the magnitude and frequency of volume reactions to earnings announcements, particularly for large firms. The increase in large firms’ trading volume reactions is so pronounced that the relation between volume reactions and firm size has turned positive in recent years, reversing Bamber's ( , ) previously documented negative relation. We provide intuition and empirical evidence that our results are attributable to the resolution of differential prior precision among increasingly diverse investors following large firms.

Abstract This study provides evidence regarding the effects of online trading on stock price and trading volume reactions to quarterly earnings announcements. We test for differences in stock price and volume reactions to quarterly earnings announcements between a period with a significant amount of online trading (1996‐99) and a period without online trading (1992‐95). We conjecture that online trading has increased the proportion of naive investors in the market. We predict that this will result in (1) a decrease in the average precision of investor information prior to earnings announcements leading to higher earnings response coefficients (ERCs), (2) an increase in differential interpretation of earnings leading to higher trading volume reactions that are unrelated to price change, and (3) a decrease in differential prior precision leading to a decrease in the association between trading volume and absolute price change. We find evidence consistent with all three predictions. Our findings are relevant for assessing the validity of concerns about online trading expressed by regulators and the validity of theoretical models of trade with asymmetrically informed investors.

This study examines how auditors' job performance is affected by the interaction between individual auditors' locus of control and the extent to which the employing audit firm uses a structured audit technology. We distributed an instrument that measures locus of control (“internal” vs. “external”) and other key constructs to staff- and senior-level auditors from the two most structured and the two least structured (then) Big 6 accounting firms. Results indicate that supervisor-assessed job performance is positively associated with the “fit” between individual auditors' locus of control and the employing firm's audit structure. Specifically, auditors who have an internal locus of control perform at a higher level at unstructured than at structured firms, on average, while auditors who have an external locus of control perform better at structured than at unstructured firms. These findings are relevant to audit firms and individual auditors seeking a match between personal and firm characteristics, and to firms seeking to determine the potential impact of audit reengineering that may alter the level of structure in their audit approaches.