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Accounting Methods (accounting + methods)
Selected AbstractsAccounting Policy Disclosures and Analysts' ForecastsCONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2003Ole-Kristian Hope Abstract Using an international sample, I investigate whether the extent of firms' disclosure of their accounting policies in the annual report is associated with properties of analysts' earnings forecasts. Controlling for firm- and country-level variables, I find that the level of accounting policy disclosure is significantly negatively related to forecast dispersion and forecast error. In particular, I find that accounting policy disclosures are incrementally useful to analysts over and above all other annual report disclosures. These findings suggest that accounting policy disclosures reduce uncertainty about forecasted earnings. I find univariate but not multivariate support for the hypothesis that accounting policy disclosures are especially helpful to analysts in environments where firms can choose among a larger set of accounting methods. [source] Efficient contracting and accountingACCOUNTING & FINANCE, Issue 2 2003David Emanuel This paper examines the role of accounting in an efficient contracting perspective of the firm. The firm is an alternative to the market when the costs of using the market become excessive. When a firm replaces the market, authority substitutes for the price mechanism in determining how decisions are made. This paper examines accounting's role in controlling the firm to ensure resources are put to their highest-value use. Accounting, together with employment contracts, compensation arrangements, debt contracts, internal and external auditors, and the board of directors including its audit and compensation committees comprise a package of mechanisms that have evolved to govern the firm. These institutional devices become the firm's efficient contracting technology. As accounting is part of that contracting technology, the accounting controls and systems that evolve and get implemented are efficient and the accounting methods that are used in calculating the numbers that form part of the firm's contractual arrangements are, likewise, efficient. [source] Applied Research in Accounting: A Commentary,ACCOUNTING PERSPECTIVES, Issue 2 2004ALAN J. RICHARDSON ABSTRACT The mission of Canadian Accounting Perspectives is to provide a forum for "applied research" in accounting, but this key term is not defined. I identify three forms of applied research: (1) the use of existing knowledge to find solutions to current problems; (2) the use of positivist research methods to conduct critical tests between current alternative accounting methods and to identify empirical regularities that contribute to the development of technologies of practice; and (3) the use of disciplined inquiry and action research to develop mid-range theory and generate empirical results that advance the interests or increase the capabilities of an identified community. This third form of applied research may provide the best approach to bridging the schism between academe and practice. [source] Disclosure Practices, Enforcement of Accounting Standards, and Analysts' Forecast Accuracy: An International StudyJOURNAL OF ACCOUNTING RESEARCH, Issue 2 2003Ole-Kristian Hope Using a sample from 22 countries, I investigate the relations between the accuracy of analysts' earnings forecasts and the level of annual report disclosure, and between forecast accuracy and the degree of enforcement of accounting standards. I document that firm-level disclosures are positively related to forecast accuracy, suggesting that such disclosures provide useful information to analysts. I construct a comprehensive measure of enforcement and find that strong enforcement is associated with higher forecast accuracy. This finding is consistent with the hypothesis that enforcement encourages managers to follow prescribed accounting rules, which, in turn, reduces analysts' uncertainty about future earnings. I also find evidence consistent with disclosures being more important when analyst following is low and with enforcement being more important when more choice among accounting methods is allowed. [source] Relative Value Relevance of Alternative Accounting Treatments for Unrealized Gains: Implications for the IASBJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 3 2006Stephen Owusu-Ansah We investigate the relative value relevance of the alternative accounting methods for unrealized gains on investment properties in New Zealand (NZ). Using both the Likelihood-ratio test and the F -test, we find that, while preferred by the NZ standard setter, recognition of unrealized gains in the income statement is not superior to (or significantly different from) recognition of unrealized gains in revaluation reserve in terms of their value relevance. The results are robust to the different research methods we used. Our results have implications for the International Accounting Standards Board in terms of: (i) recognizing changes in fair values of investment properties in the income statement under the revised IAS 40: Investment Property in countries where "realization" refers to net income available for distribution; (ii) its intent to issue a standard on a single statement of comprehensive income; and (iii) its initiative to reduce or eliminate alternative accounting treatments for similar fact situations in its standards. [source] Accounting for Social Value in Nonprofits and For-ProfitsNONPROFIT MANAGEMENT & LEADERSHIP, Issue 1 2001Jack Quarter The authors argue that social value can serve as a bridge between the nonprofit and for-profit sectors. They further propose that social value is not simply an abstract concept but can be measured by applying social accounting methods. The authors argue that nonprofits are founded on a social mission but that traditional accounting approaches do not properly assess their social products. They illustrate the centrality of social value, both to nonprofits and for-profits, in two ways: (1) a discussion of for-profit firms that behave much like nonprofits and (2) an application of the social accounting model. The authors discuss two types of firms: (1) for-profits whose shares are held in a trust and therefore operate much like corporations without shareholdersor like nonprofits and (2) for-profits whose owners do not exercise the rights associated with their property. They then apply a social accounting model to nonprofit employment training programs to illustrate how the inclusion of social variables changes the assessment of an organization's value. They conclude with a discussion of a social accountability framework that embraces both nonprofits and for-profits. [source] Why the Tigers Roared: Capital Accumulation and the East Asian MiraclePACIFIC ECONOMIC REVIEW, Issue 2 2002Peter E. Robertson Recent growth accounting studies of Hong Kong, Singapore, Taiwan and South Korea have found that the Solow residuals in these economies were relatively small. Given the high capital contributions, these results are often interpreted as evidence that factor accumulation, savings and investment were the principal cause of the East Asian miracle. This paper develops an alternative method of analysing these data, combining growth accounting methods with the linearized neoclassical growth model of Mankiw et al. (1992). The method explicitly quantifies the extent to which increases in productivity, as measured by the Solow residual, induced capital accumulation in these economies. It shows that in Hong Kong, Taiwan and South Korea, productivity growth contributed between half and two-thirds of the growth in GDP per worker over a 20-year period. 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