SOME ECONOMIC DETERMINANTS OF MANAGEMENT LOBBYING FOR ALTERNATIVE METHODS OF ACCOUNTING: EVIDENCE FROM THE ACCOUNTING FOR INTEREST COSTS ISSUE

This paper extends the theory of management lobbying on accounting standards. Specifically, it is hypothesized that, in addition to the variables previously identified in literature, the capital structure of the firm would affect its management's lobbying position on an accounting standard. The results of an empirical investigation of the lobbying position of firms on the accounting for interest costs issue, reported in the paper, confirm the extended theory.     

THE SHARING OF MEANING BETWEEN ACCOUNTING STUDENTS AND MEMBERS OF THE ACCOUNTING PROFESSION

This study examines the extent to which accounting students and practising accountants share the same meanings of fundamental accounting concepts. In doing so, it provides evidence on the suitability of using accounting students as surrogates for accounting practitioners in the study of connotative meaning in accounting. Using the semantic differential technique, the “cognitive structure” (the structure within which meaning is held) as well as the positioning or placement of concepts within the structure were determined for both groups. Each group was found to have a similar cognitive structure (a three dimensional structure comparable to the classic structure found in the psychology literature, Osgood, Suci and Tannenbaum, 1957). However, the placement or positioning of concepts by students within that shared structure was significantly different to that of accounting practitioners.     

GOVERNMENTAL ACCOUNTING IN NORWAY: A DISCUSSION WITH IMPLICATIONS FOR INTERNATIONAL DEVELOPMENT

Accrual accounting is now being introduced in governmental organizations internationally. Some scholars have, however, questioned this development, implying that other accounting theories, like cameral accounting, should also be considered for use in these organizations. Since Norway is a country, which has not introduced accrual accounting in the governmental sector, the purpose of this paper is to study the evolution of governmental accounting in this country. Based on the Norwegian experiences, the paper aims to present some conclusions for the further international development of governmental accounting.     

THE ATTITUDES OF ACCOUNTING STUDENTS TO WORKING WITH COMPUTERS: A PRELIMINARY STUDY

A sample of final-year accounting students, 94 from an Australian university and 61 from an Australian CAE, completed a special scale to determine their attitudes to working with computers, as well as items to assess a variety of hypothesized correlates of such attitudes including age, sex, school performance, tertiary accounting performance, usage of computers, access to a computer at home, preference for working with machines rather than people, and self-confidence. The amount of time students spent with computers was significantly related to students' attitudes toward working with computers (being directly related to positive attitudes and inversely related to negative attitudes). The relationships between the other correlates and attitudes to working with computers were all nonsignificant. The majority of students held very favourable attitudes to working with computers.     

REACTIONS TO REGULATION OF ACCOUNTING FOR GOODWILL

Regulations designed to achieve “uniformity in practice” in Australian firms' reporting of goodwill were first adopted in 1985 with the introduction of AAS18. Because of the requirement to amortise purchased goodwill, a number of firms either did not comply or took evasive actions to mitigate the effects of the standard. This paper documents and explains the pre-regulation cross-sectional variation in accounting practices. Reactions to the set of regulations introduced between 1985 and 1989 are then described and explained through a longitudinal study of accounting policy choice. We develop hypotheses which explain why the goodwill accounting rules reversed relations between the accounting methods adopted by firms and both the earnings effect of compliance and the market value of the firm's goodwill. The results are confirmatory.     

ACCOUNTING FOR THE COST OF CAPITAL: AN EMPIRICAL EXAMINATION

One of accounting's oldest issues, accounting for interest costs, has become a subject of increased concern in recent years. This study empirically addresses the issue of whether the cost of equity capital should be charged against income. Fourteen measures of the cost of equity capital are examined. The empirical tests involve contemporaneous correlation of accounting betas for each income measure with market betas for a sample of 200 companies. The results of these association tests indicate that income measures, net of the cost of equity capital, may have greater information content than income as presently reported.     

ACCOUNTING DETERMINED AND MARKET DETERMNED RISK MEASURES: SOME TESTS OF ASSOCIATION AND PREDICTIVE ABILITY

This paper examines the degree of association between certain measures of risk that commonly feature in the accounting literature, and the β coefficient, the risk measure given by the capital asset pricing model. Tests were applied to a subset of New Zealand listed public company securities. A weak association was found. Tests of the predictive ability of an accounting based regression model showed that its performance was inferior to other commonly assumed predictive models.     

ACCRUAL ACCOUNTING AND CASH ACCOUNTING: RELATIVE MERITS OF DERIVED ACCOUNTING INDICATOR NUMBERS

The purpose of this study was to evaluate the relative merits of performance indicators derived from either an income statement and a balance sheet both based on accrual accounting, or cash flow accounting. The balance sheet number showed lower variability and a higher persistency than the cash flow accounting and the income statement numbers. This phenomenon was attributed to an income smoothing distortion and a selective market response hypothesis. One implication for the standard setting bodies may be to favour an asset/liability view of earnings rather than either a revenue/expense or cash flow view.     

THE DEVELOPMENT OF CONCEPTUAL FRAMEWORKS OF ACCOUNTING FOR THE PUBLIC SECTOR

This paper offers a review of the conceptual framework projects that have been done by, or on behalf of, accounting standard-setting bodies, and that have concerned themselves with public sector accounting. Developments since 1966 in North America are the primary focus, although the UK and New Zealand are also explicitly addressed. The major theme identified is the ubiquity of the user/user needs approach, despite the continuing lack of evidence about user needs. The paper tries to explain this and concludes that standard-setting bodies have used these conceptual frameworks to establish their own legitimacy, by appealing to the public interest.