“THE IDENTIFICATION PROBLEM AND THE VALIDITY OF ECONOMIC MODELS”: A COMMENT1

Inasmuch as mathematical propositions refer to reality they are not certain, and inasmuch as they are certain they do not apply to reality.     

VALUE FOR MONEY AUDITING IN NEW ZEALAND: COMPETING FOR CONTROL IN THE PUBLIC SECTOR

This paper provides an overview of the changing role of performance or Value for Money (VFM) auditing in the New Zealand public sector. In many countries there has been a strong interest in public sector reform and the place of accounting technologies such as VFM. A theoretical framework, derived from public policy literature, is used to explain the changing role and relevance of VFM auditing in New Zealand. Within the policy process problems, solutions and opportunities are relatively separate streams. Expert groups or epistemic communities compete to define the problem and to advocate their particular solutions. The Office of the Auditor-General is presented as an epistemic community within the New Zealand policy process and the technology of VFM as a solution to the problems of the day. However, the Treasury (NZ) also developed a policy solution involving radical restructure of the public sector, challenging the existing role of VFM. In response, the Audit Office re-defined the role of VFM auditing as a service to the parliamentary select committees. The changing role of VFM illustrates the flexible and the contestable nature of accounting technologies and casts some doubt on the argument that the growth of accounting in the public sector is inevitable.     

Managerial Evaluations of the Relevance of Cash vs Accrual-based Financial Reports in the Australian Food Industry

Many authors have argued that a cashflow statement prepared under the direct method is a superior decision-making tool because it avoids perceived measurement and classification pitfalls associated with conventional accrual-accounting procedures. This article investigates comparative decision-usefulness ratings of the cash flow statement, profit-and-loss statement and balance sheet by a sample of accounting managers and executives. The ratings were further compared against firms' management accounting systems. Results suggest that the cashflow statement may be a complementary source of financial information for managers and may enhance the usefulness of information in accrualbased financial reports and management accounting systems.     

Working Orders in Limit Order Markets and Floor Exchanges

We analyze limit order markets and floor exchanges, assuming an informed trader and discretionary liquidity traders use market orders and can either submit block orders or work their demands as a series of small orders. By working their demands, large market order traders pool with small traders. We show that every equilibrium on a floor exchange must involve at least partial pooling. Moreover, there is always a fully pooling (worked order) equilibrium on a floor exchange that is equivalent to a block order equilibrium in a limit order market.