Managers of conglomerates are hypothesized to effect firm-enlarging actions that yield greater remuneration for them but losses for shareholders. This hypothesis is tested by examining the gains and losses to senior managers and shareholders of twenty-nine large conglomerates from 1970 through 1975. The data reveal that the average manager's annual gains and losses from changes in stock returns far exceeded his remuneration. Furthermore, top managers of conglomerates where stock returns decreased left their positions more frequently than did the officers of the other conglomerates. These findings are inconsistent with the self-serving managerial hypothesis as it usually is stated.

Accounting as a means to an end, rather than as an end in itself, is the basic concept on which this essay is based. The ends that accounting serves are control, information for decisions, and an overview, or conspectus, of the enterprise. For these purposes, traditional, transactions‐based accounts are useful, because they yield trustworthy reports of resource flows into and out of an enterprise. Government intervention has emphasized and extended the inherent and cost‐determined limitations of traditional accounting. Though such critics as Professor Chambers are upset at this situation, they have not shown how or which change would be beneficial, net of costs, to users. Exit values, in particular, are not the philosopher's stone that Professor Chambers seeks. As this essay shows, neither these nor other measures of economic values fulfill Professor Chambers' demands. Though traditional accounting has its limitations, they are debilitating only when one holds unrealistic expectations. While I doubt that the benefits from changes such as those suggested by Professor Chambers would exceed their costs, this is an empirical question on which research would be desirable. Résumé. Cet essai se base sur le concept fondamental selon lequel la comptabilité constitue un moyen pour arriver à une fin, plutôt qu'une fin en soi. Assurer le contrôle, fournir des informations pour la prise de décisions et donner un aperçu général ou vue d'ensemble, de l'entreprise, telles sont les fins de la comptabilité. A ces fins, les comptes traditionnels basés sur les opérations s'avèrent utiles parce qu'ils fournissent des rapports fidèles des flux internes et externes des ressources d'une entreprise. L'intervention gouvernementale a souligné et accentué les lacunes reliées aux coûts inhérents à la comptabilité traditionnelle. Bien que des critiques telle celle du professeur Chambers s'offusquent de cette situation, elles n'ont pas encore démontré comment ou quel changement serait profitable, déduction faite des coûts, aux usagers. Les valeurs de sortie, en particulier, ne représentent pas la pierre philosophale que cherche le professeur Chambers. Comme le révèle cet essai, aucune mesure des valeurs économiques ne satisfait les exigences du professeur Chambers. Quoique la comptabilité traditionnelle ait ses limites, elles ne s'avèrent embarassantes que lorsque notre attente est irréaliste. Même si je doute que les avantages des changements suggérés par le professeur Chambers puissent dépasser leurs coûts, on soulève ici un problème empirique pour lequel des recherches seraient souhaitables.

Published accounting reports-the balance sheet, income statement, and funds statement-are prepared for the use of investors, creditors, and others with whom the accountant is not in direct contact. It is therefore difficult for him to determine which data they find useful. Consequently, several arguments have arisen as to which data are the best. Examples of these competing theories are the current operating performance concept versus clean surplus, price level versus historical cost depreciation, and sales versus cash flow versus net income. Even if accountants knew which constructs were best, other questions would remain. For example, are the annual data published in corporate reports used by investors to make decisions? Do quarterly reports add useful information? Most corporations publish comparative data that date back many years. Do stockholders use these past data? This paper seeks to answer some of these questions by determining, empirically, which published data are used by investors, as reflected by changes in the market price of common stocks. To provide a meaningful test, the relationship between common stock prices, published accounting information and other factors is specified first. Then models are developed that describe how investors may use, published accounting data. Finally the model is tested with relevant data, and conclusions are drawn.

The State of Maine recently imposed an additional regulation on the maturity of small loans offered by finance companies, presumably to protect the consumer. The effectively restricted the maturity of these high interest rate loans to 36 months. Within five years, the number of licensees (finance company offices) declined from 116 to 24. Within another five years, all of these lenders had completely ceased operations. Hypotheses on the effect and value to consumers of the regulation are stated operationally and tested empirically. This study includes estimation of the loan companies' cost function, (accounting) profit rates and output and a survey of the individuals directly affected by the demise of the companies. The analysis indicates (1) that the maturity restriction made ordinary operations unprofitable, (2) why this occurred, and (3) that half of the consumers did not obtain funds elsewhere.

This paper explores differences, costs and benefits of the two systems public regulation of financial disclosure in the U.S. and private regulation in Great Britain and concludes that, in many important respects, private regulation is preferable. Though the U.S. and Great Britain are dissimilar in many important respects, their security markets are rather alike. Though the U.S. Federal Securities Acts were modeled after Great Britain's Companies Acts, they are administered quite differently. In 1934, the U.S. established the Securities and Exchange Commission (SEC), giving it the authority to prepare and administer regulations governing the financial disclosure mandated by the Securities Act of 1933 and the Securities Exchange Act of 1934. In contrast, Great Britain's Companies Acts stand on their own in the sense that the specific disclosure required is given in acts rather than in regulations promulgated by the Great Britain's Department of Trade (DT). Although the DT has the power to investigate failures of directors to conform to the requirements of the acts, particularly when such an investigation is requested by security holders, it serves primarily as a repository for the statements filed pursuant to acts.