Announcements
ACCOUNTING AND BUSINESS RESEARCH
Number 72 Autumn 1988
A research quarterly published by the
Institute of Chartered Accountants
in England and Wales
Editors: C. W. Nobes, University of Reading R. H. Parker, University of Exeter
CONTENTS
Ralph Estes D. D. Reames
Effects of Personal Characteristics on Materiality Decisions: A Multivariate Analysis
M. J. Jones
A Longitudinal Study of the Readability of the Chairman’s Narratives in the Corporate Reports of a UK Company
Rifaat Ahmed Abdel Karim
The Impact of the UK Price Codes on Accounting Functions in Organisations: A Power Perspective
K. Keasey R. Watson P. Wynarczyk
Ron Mear Michael Firth
Richard H. Pike
The Small Company Audit Qualification: A Preliminary Investigation
Risk Perceptions of Financial Analysts and the Use of Market and Accounting Data
An Empirical Study of the Adoption of Sophisticated Capital Budgeting Practices and Decision-Making Effectiveness
Corporate Financial Reporting in Nigeria R. S. O. Wallace
The Application of Management Accounting Techniques to Marketing
An Analysis of the Reformed Corporation Tax: A Comment and an Extension
Matrix-Based Accounting: A Comment Book Reviews
J. Ratnatunga
R. Pike
G. J. Hooley
Graeme Macdonald
M. J. Mepham
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Announcement
JOURNAL OF ACCOUNTING EDUCATION
Volume 6, No. 2 Fall, 1988
Editor Managing Editor
E. Kent St. Pierre Lamont F. Steedle
James Madison University James Madison University
Associate Editors
Richard E. Baker Bradley M. Roof
Northern Illinois University James Madison University
Albert H. Frakes Kevin D. Stocks
Washington State University Brigham Young University
Lawrence H. Hammer David E. Stout
Oklahoma State University Villanova University
William A. Raabe
University of Wisconsin-Milwaukee
MAIN SECTION
A Compilation of Recent Surveys and Company-Specific Descriptions
of Management Accounting Practices — Chee W. Chow,
Michael D. Shields and Adrian Wong-Boren
The Educational Impact of Unresolved Conceptual Issues in Interest
Capitalization — Stanley E. Warner, Jr. and Frederick D.
Whitehurst
Making By-Products a Main Product of Discussion: A Challenge to
Accounting Educators — David E. Stout and Donald E. Wygal
Differences in Competencies of Newly Licensed Accountants in the
United States and Great Britain — Edward R. Shoenthal
FASB’s Conceptual Framework: Is It Being Taught?—Nancy E. Smith . . . .
The Perceived Availabity of Resources Which Contribute to Accounting
Faculty Productivity — Rodney G. Alsup, Michael L.
Holland and Fred A. Jacobs
High School Accounting and Student Performance in the First Level
University Accounting Course: A U.K. Study — Falconer Mitchell . ..
Preparation for a First Level University Accounting Course: The
Experience in New Zealand — Stephen P. Keef
TEACHING AND EDUCATIONAL NOTES SECTION
Budgeting and Profit Variance Analysis Using a Financial Planning
Language — Terrance R. Skantz
Accountingfor “Negative Salvage ” — William R. Welke
Active Learning for Budgeting Concepts — Paul Krause
An Alternative Approach to Determining Present and Future Value
Interest Factors for Annuities Due — Stuart Rosenstein and
Ronald O. Reed
A Spreadsheet Analysis of Different Costing Systems — Peter Chalos
Announcement
A
A
ccounting uditing & ccountability
Volume 1 Number 2 1988 CONTENTS
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ISSN 0951-3574
Copyright © 1988 MCB University
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Librarians
Printed by Eyre & Spottiswoode Margate CT9 1NU
Editors
James E. Guthrie and Lee D. Parker
Abstracts and Keywords 2
Perspectives on Accounting
Systems and Human Behaviour
Kenneth R. Ferris and
Mark E. Haskins 3
Accounting in its Social Context: An Analysis of the Accounting Systems of the Church of England
Richard C. Laughlin 19
An Analysis of the Association
between Pollution Disclosure and Economic Performance
Martin Freedman and
Bikki Jaggi 43
Interpretive Sociology and Management Accounting Research — A Critical Review
Wai Fong Chua 59
Announcement
ACCOUNTING AND FINANCE
Vol. 28 No. 2 November 1988
“Accounting and Finance”: Statistics
INTEGRATING CREDIT MODELS USING ACCOUNTING INFORMATION WITH LOAN OFFICERS’ DECISION PROCESSES
Waymond Rodgers and Lester W. Johnson 1
AN EMPIRICAL TEST OF THE ARBITRAGE PRICING THEORY ON AUSTRALIAN STOCK RETURNS 1974-85
Robert W. Faff 23
THE GORDON-SHAPIRO DIVIDEND GROWTH FORMULA AND INFLATION
Martin Lally 45
PREDICTING PRIVATE COMPANY FAILURE
Raymond P. McNamara, Neil J. Cocks and David F. Hamilton .. 53
A NOTE ON THE COST OF CAPITAL AND INVESTMENT EVALUATION FOR COMPANIES UNDER THE IMPUTATION TAX
R.R. Officer 65
EDUCATION NOTES 72
PERFORMANCE IN ACCOUNTANCY COURSES
Stephen P. Keef 73
INTEGRATING COMPUTERS INTO ACCOUNTING EDUCATION: A SURVEY OF AUSTRALIAN UNIVERSITIES AND COLLEGES
P.F. Kent and G.J. Linnegar 81
BOOK REVIEWS 93
“Accounting and Finance”: Referees Reports Received 106
Copyright
e 1988 by The Accounting Association of Australia and New Zealand.
The object of Accounting and Finance is to promote the wide dissemination of the results of research and other scholarly inquiries. Permission is hereby granted to reproduce any of the contents of Accounting and Finance for use in courses of instruction, so long as the source and the Accounting Association of Australia and New Zealand copyright are indicated in any such reproductions. Written applications must be made to the Editor for permission to reproduce any of the contents of the Journal for use in other than courses of instruction — e.g., inclusion in books of readings or in other publications intended for general distribution.
In consideration for the grant of permission by the Journal in such instances, the applicant must notify the author(s) in writing of the intended use to be made of each reproduction. Except where otherwise noted in articles, the copyright interest has been transferred to the Accounting Association of Australia and New Zealand. Where the author(s) has (have) not transferred the copyright to the Association, applicants must seek permission to reproduce (for all purposes) directly from the author(s). These conditions apply to all articles published in Accounting and Finance and its predecessor journal Accounting Education from Volume 1.
Announcement
the Managing Editor and Editor
A rrOTTNTTNf WILLIAM R. KINNEY, JR. ACCOUNTING University of Texas at Austin
REVIEW Editors
ROBERT LIBBY University of Michigan
Quarterly Journal ROBERT P. MAGEE
of the Northwestern University
GERALD L. SALAMON
American Accounting Association Indiana University
Consulting Editors
JOEL S. DEMSKI
Yale University
ROBERT W. HOLTHAUSEN University of Chicago
VOL. LXIII OCTOBER 1988 No. 4
MAIN ARTICLES
Analysts’ Forecasts, Earnings Variability, and Option Pricing:
Empirical Evidence
…. LANE A. DALEY, DAVID W. SENKOW, and ROBERT L. VIGELAND 563
Cross-Sectional Capital Market Research and Model
Specification WAYNE R. LANDSMAN and JOSEPH MAGLIOLO 586
Underpricing of New Issues and the Choice of Auditor as a
Signal of Investment Banker Reputation
…. RONALD J. BALVERS, BILL MCDONALD, and ROBERT E. MILLER 605
Sequential Belief Revision in Auditing
ALISON HUBBARD ASHTON and ROBERT H. ASHTON 623
NOTES
Accounting Changes: Successful Versus Unsuccessful Firms
STEVEN LILEN, MARTIN MELLMAN, and VICTOR PASTENA 642
Popper’s Methodology of Falsificationism and Accounting
Research RUTH D. HINES 657
Auditor Changes: A Joint Test of Theories Relating to Agency
Costs and Auditor Differentiation
JERE R FRANCIS and EARL R. WILSON 663
Departments
SMALL SMAPLE STUDIES, M. Edgar Barrett, Editor Articulation Problems Between the Balance Sheet and
the Funds Statement. MOSTAFA M. MAKSY 683
EDUCATION RESEARCH, Frank H. Selto, Editor
The Controllability Principle in Responsibility
Accounting RICK ANTLE and JOEL S. DEMSKI 700
BOOK REVIEWS, Richard P. Brief, Editor
Announcement
CONTEMPORARY Vol 5/ No 1/Fall/automne 1988
ACCOUNTING
RESEARCH / RECHERCHE
COMPTABLE
CONTEMPORAINE
CONTENTS
Articles
Auditors’ Usage of Unaudited Book Values When Making Presampling Audit
Value Estimates M.D. Shields, I. Solomon and W.S. Waller 1
The Pricing of Audit Services: The Canadian Perspective D.Y. Chung and W. D. Lindsay 19
Empirical Comparison of Subjective Probability Elicitation Methods W.F. Wright 47
Comparison empirique des méthodes d’inféference de probabilités
subjectives W.F. Wright 58
Improving Performance Through Cost Allocation S.I. Cohen and M. Loeb 70
Unobservable Outcomes and Multiattribute Preferences in the Evaluation of Managerial
Performance R.D. Banker, S.M. Datar and A. Maindiratta 96
Discussion of “Unobservable Outcomes and Multiattribute Preferences in the Evaluation
of Managerial Performance”, G.A. Feltham 125
Firm-Specific Information and Efficient Resource Allocation
G.A. Feltham and P.O Christensen 133
Discussion of “Firm-Specific Information and Efficient Resource Allocation” R. Antle 170
Joint Production Decisions: The Variable Proportions Case L. R. Amey and J-L. Goffin 174
Variance Analysis: A Unifying Cost Function Approach M.N. Darrough 199
Exercising Budgetary Control in Automated Production Environments Y.M. Mensah 222
Discussion of “Exercising Budgetary Control in Automated Production
Environments”, R.E. Jensen 250
Analysis of the Organizational Related to Tight Budget Goals R. Simons 267
The Sensitivity of Financial Distress Prediction Models to Departures from Normality
W. Hopwood, J. McKeown and J. Mutchler 284
Trading Volume Reactions to a Change in Dividend Policy: The Canadian Evidence
G. Richardson, S.E. Sefcik and R. Thompson 299
Incremental Infromation Content of Earnings and Nonearnings Based Financial
Ratios W.S. Hopwood and T.F. Schaefer 318
Capital Values in Use vs. Replacement Costs: Theory and Canadian Evidence
D.B. Thornton 343
Inventory Accounting and Earnings/Price Ratios: A Puzzle C.J. Lee 371
Discussion of “Inventory Accounting and Earnings/Price Ratios: A Puzzle” G.C. Biddle 389
Book Reviews/Compte rendu de livres
Editor/Rédacteur: Daniel B. Thornton
A.A. Atkinson, Infra-firm Cost and Resource Allocations: Theory and Practice I.M. Gordon 397
L.J. Brooks Jr., Canadian Corporate Social Performance S. Glass 400
Canadian Institute of Chartered Accountants, Accounting and Financial Reporting by
Agricultural Producers: A Research Study J.H. Clark and W.M. Braithwaite 405
S.J. Gaston, Controlling and Auditing Small Computer Systems K.W. Clowes 408
S.H. Wescott and R.E. Seiler, Women in the Accounting Profession CA. McKeen 412
G.A. Welsch, D.G. Short and G.R. Chesley, Fundamentals of Financial Accounting (First
Canadian Edition) B.E. Lynn 415
Manuscripts Accepted for Future Publication 421
Book Reviews Scheduled for Future Publication 422
Announcement
Working Paper Series
Available in three single bound volumes are the first 60 working papers published by The Academy of Accounting Historians. These 6″ x 9″ books include the following papers
and their authors.
Working Papers 1-20 Volume 1
Working Paper Number
1. “The CPA’s Professional Heritage, Part I,” by John L. Carey.
2. “The Audit of Historical Records as a Learning Device in Studying Environmental and Socio-Economic Influences on Accounting,” by Richard H. Homburger
3. “The Accounts of Ancient Rome,” by Kenneth S. Most.
4. “Survey of the Development of Auditing in Germany,” by Rosa-Elisabeth Gassmann.
5. “The CPA’s Professional Heritage, Part II,” by John L. Carey.
6. “A Chronological Index Prepared for John L. Carey’s The Rise of the Accounting Profession, Volume I, 1896-1936,” by Gary John Previts.
7. “The State of Bookkeeping in Upper Germany at the Time of the Fuggers and Welsers,” by Hermann Kellenbenz.
8. “A Chronological Index Prepared for John L. Carey’s The Rise of the Accounting Profession, Volume II, 1937-1970,” by Gary John Previts.
9. “A Bibliography on the Relationship Between Scientific Management and Standard Costing,” by Marc J. Epstein.
10. “A Significant Year (1873) in the History of Bookkeeping in Japan,” by Kojiro Nishikawa.
11. “Historical Development of Early Accounting Concepts and Their Relation to Certain Economic Concepts,” by Maurice S. Newman.
12. “Thirty-six Classic Articles from the 1905-1930 Issues of The Journal of Accountancy,” by Richard Vangermeersch.
13. “The Development of the Theory of Continuously Contemporary Accounting,” by R. J. Chambers.
14. “The CPA’s Professional Heritage, Part III,” by John L. Carey.
15. “Two Papers on the History of Valuation Theory (I. Management Behavior on Original Valuation of Tangible and Intangible Fixed Assets. U The Significance of Write-ups of Tangible Fixed Assets in the 1920’s),” by Richard Vangermeersch.
16. “The Golden Anniversary of One of Accounting History’s Mysterious Contributors: Albert DuPont,” by Gary John Previts and S. Paul Garner.
17. “Evidential Matter Pertaining to the Historical Development of the Concepts of Disclosure and Its Uses as a Teaching Aid,” by Hans V. Johnson.
18. “The Evolution of Pooling of Interests Accounting: 1945-1970,” by Frank R. Rayburn.
19. “The Study of Accounting History,” by Vahe Baladouni.
20. “The Evolution of Corporate Reporting Practices in Canada,” by George J. Murphy.
Working Papers 21-40 Volume 2
Working Paper Number
21. “Early Greek Accounting on Estates (Fourth Century B.C.),” by George J. Costouros.
22. “The Traditional Accounting Systems in the Oriental Countries — Korea, China, Japan,” by Jong Hyeon Huh.
23. “The Evolution of Ethical Codes in Accounting,” by Joyce C. Lambert and S. J. Lambert, III.
24. “The Oldest Book of Double Entry Bookkeeping in Germany,” by Kiyoshi Inoue.
25. “An Annotated Bibliography for Historical Research in Cost Accounting,” by Edwin Bartenstein.
26. “The Role of Academic Accounting Research: An Historical Perspective,” by Eric Flamholtz.
27. “The Structure of Scientific Revolution and Its Implications for the Development of Accounting Policy,” by Diana Flamholtz.
28. “The Development of Accountancy in Hungary Since 1946. . .,” by Rezso L. Scholcz.
29. “Historic Origins of the Purchase vs. Pooling of Interests Problem,” by Wesley T. Andrews.
30. “Current Efforts to Develop a Conceptual Framework for Financial Accounting and Reporting,” by William G. Shenkir.
31. “Influence of Nineteenth and Early Twentieth Century Railroad Accounting on Development of Modern Accounting Theory,” by James L. Boockholdt.
32. “The Historical Development of Standard Costing Systems Until 1920,” by Nathan Kranowski.
33. “The CPA’s Professional Heritage, Part IV,” by John L. Carey.
34. “The Evolution of Accounting Theory in Europe from 1900 to the Present Day and Its Implications on Industrial Management of Tomorrow,” by Paul Weilenmann.
35. “Sombart on Accounting History,” by Ken neth S. Most.
36. “A Most Unforgetable Accounting Historian: Frederic G. Gamble,” by Paul Garner and Reza Espahbodi.
37. “Historical Overview of Developments in Cost and Managerial Accounting,” by M. Zafar Iqbal.
38. “Comments on Accounting Disclosures in the Baltimore and Ohio Annual Reports from 1828 Through 1850,” by Richard Vangermeersch.
39. “A Contemporary Review of the Evolution of Value Concepts (1500-1930),” by J. W. Martin.
40. “Tracing the Development of a Conceptual Framework of Accounting — A Western Euro pean and North American Linkage: A Partial Examination,” by Stanley C. W. Salvary.
Order From: Secretary
The Academy of Accounting Historians P. O. Box 658 Georgia State University Atlanta, Georgia 30303 U.S.A.
Cost: $5 to members of The Academy of Accounting Historians; $7.50 to non-members Make check payable to: The Academy of Accounting Historians
CONSULTING REFEREES
The individuals listed below served as consulting referees to The Accounting Historians Journal providing manuscript review and consultation through September 30, 1988.
Oscar Gellein, Financial Accounting Standards Board [Retired]
Jan Heier, Auburn University [Montgomery]
Anthony Hopwood, University of London
Anthony Krzystofik, University of Massachusetts
Geoffrey Lee, University of Nottingham
Peter L. McMickle, Memphis State University
Maurice Moonitz, University of California, Berkeley’ [Emeritus]
Belverd Needles, DePaul University
Joseph Razek, University of New Orleans
Ross Skinner, University of Toronto
Richard Vangermeersch, University of Rhode Island
Thomas Woods, Spring Hill College
