This study uses concurrent verbal protocol analysis to examine the decision processes of lenders as they evaluate the financial information of a loan applicant. Of specific interest is the lenders' use of Statement of Financial Accounting Standards Board No. 95 (FAS 95), Statement of Cash Flows, in that decision process.

This study examines the influences of culture on the implementation of a U.S.-based Activity-Based Costing (ABC) in three Thai organizations.

The purpose of this dissertation is to examine the effects of activity-based costing (ABC) and activity-based management (ABM) on managerial and employee behavior.

The Financial Accounting Standards Board is a private sector rule making body. Congressional inquiries have questioned whether the setting of accountin standards should remain in the private sector. Congressional critics have charged that the FASB has been captured by special interests and recommended that a governmental agency assume responsibility for standard setting. Specifically, critics charge that large corporations capture the Big Eight accounting firms who, in turn, have captured the FASB. Previous capture studies have concluded that the standard setting process is pluralistic and that the FASB has not been captured. The studies have focused on the influence of the Big Eight to determine if the FASB has been captured. They assume if standards do not reflect the expressed preferences of the Big Eight, then Congressional criticisms are invalid. The studies also assume a unidirectional influence between participants in the process and have ignored the intensity of preferences of the respondents.The purpose of this study is to provide a theoretical framework to specify selection of standards that would be expected to be subject to capture. This framework also recognizes the duo-directional nature of influence. The allegations of capture were tested using the standards selected in accordance with the theoretical framework. …

This dissertation is a descriptive, exploratory examination of professional commitment, organizational commitment, and conflict between those commitments in the internal audit profession. That conflict has been suggested in prior studies as the source of dysfunctional outcomes such as increased role stress, high turnover, decreased job satisfaction, and the exercise of improper judgment leading to audit failures. The descriptive aspect of this study deals with the development of a more comprehensive structural model of the factors and relationships involved in commitment and conflict than has been developed by previous research dealing with accountants. The exploratory aspect deals with the testing and refinement of the developed model utilizing the internal audit profession as the field of examination. The model developed in this study is derived from the synthesis of factors suggested by role theory, the concept of side bets, the cosmopolitan-local construct, and the concept of commitment as a process. This research utilizes a questionnaire administered to 205 practicing internal auditors in order to test 30 hypothesized relationships. Path analysis is used to determine the significant direct relationships between variables with a process of theory trimming being conducted in order to produce more parsimonious structural models. Indirect relationships between significant variables are …

This research investigates the complementary value of a statement of cash flows (SCF) in a set of published financial statements. Selected accounting studies and selected parts of communication theory are used to argue the case for treating an SCF as a primary financial statement. Ideas adapted from communication theory are also used to decide key issues involved in developing an SCF. Specifically, the study selects a direct rather than a reconciling format for an SCF; it also defines cash to include currency, bank accounts, and marketable securities and exclude claims to cash such as notes and accounts receivable. The definition of cash limits cash flow to strict receipts and disbursements; it excludes constructive receipts and disbursements.

The purpose of this study is to shed more light on whether the investment tax credit is effective in stimulating capital investment. The sample includes 104 local cooperatives. The majority of the data was collected from the files of the St. Paul, Minnesota, Bank for Cooperatives. The study has a single purpose of determining whether the changes to the Internal Revenue Code in the Revenue Tax Act of 1978 had an effect on the capital expenditure levels of farm supply cooperatives. In 1978 the investment tax credit became fully available to cooperatives. Previous abatement rules were abolished, and unused credit was then passed through in full to the cooperative membership. The research model employed is a pooled time-series and cross-sectional approach, and includes data for years 1975 through 1983. In addition to capital expenditure data, the company-specific variables are debt/asset ratio, local margin, and net margin. Economic variables are a net interest-inflation rate factor, cash receipts from farming, and loan volume of banks for cooperatives. Also included are dummy variables 0 and 1, trend variables 1-9, and interaction variables for all the main-effects variables.

The purpose of this study was to determine the informational value of FASB Statement No. 33 current cost disclosures using the analytical technique of industry-wide decomposition analysis. The industry-wide decomposition model was used to measure the informational content of both the historical cost balance sheets (reported in the firm's annual reports) and the current cost balance sheets (prepared from the current cost disclosures) of firms in the Electric Services and Retailers industries. The two measures were then compared to determine the informational value of FASB Statement No. 33 current cost disclosures.

The purpose of this study is to provide empirical evidence relevant to perceptions of internal auditor independence. Specifically, this study investigates how the auditor practitioners (both internal and external auditors) perceive the importance of five selected factors that characterize the organizational settings of an internal audit department. Role theory is the frame of reference used to develop the conceptual model for this study in which the judgment of internal auditor independence is viewed as the role perception of internal auditors. A modified version of the Brunswik's lens model was developed to provide "paramorphic" representation of judgment of independence. The research methodology of this study is based upon a laboratory experiment in which a replicated factorial design was used to elicit the subjects' judgments of independence. The data collected from this experiment were analyzed by three statistical methods: conjoint measurement, multiple regression, and cluster analysis. The major findings follow. First, the five selected factors were not perceived as equally important by the subjects. In general, internal auditor's scope of audit. scope o^ service, and reporting level were perceived as more important than adequacy of organizational support. and formalization of audit policies. Second, the two groups of auditors disagree, significantly, on the …

Business organizations disclose financial Information to a wide range of audiences through the medium of audited financial statements. Distinct classes of readers come in contact with these statements—each reader possessing varying degrees of financial expertise. Readers as "semantic reactors" develop their own expectations and interpretations of the messages management and the auditor are attempting to convey. In the process, many readers look upon the auditor's report as a "symbol" or seal of approval. The purposes of this study were to assess the role that communication theory plays In the auditor's attestation, to examine the perceived communication effects of the expanded auditor's certificate versus the current auditor's certificate, and to recommend ways in which communication problems can be dealt with more effectively. It was concluded that a communication problem does exist in relation to the auditor's report, and communication theory can play a distinctive role in reducing the magnitude of this problem. The profession should continue to seek answers as to the proper role of the auditor and management in relation to audited financial statements, as well as to settle the question concerning whom the statements are intended to serve.

In recent years there has been a growing use of expectancy theory to study motivation and performance in accounting environments. Such research efforts have resulted in reporting some inconsistent findings and low explanatory power for the expectancy model. In an attempt to increase the explanatory power of the model, several researchers have suggested the inclusion of nonexpectancy components in the model. This research was undertaken to develop an integrative expectancy model by incorporating some elements of goal setting theory and attribution theory into the expectancy formulation. The study was also designed to provide empirical evidence on the validity of a within-subject design of the proposed model through an empirical investigation of auditors* performance behaviors to meet budgeted time in public accounting firms. Alternative performance behaviors to meet budgeted time were modeled in three choice processes. The first deals with auditors choice to report unfiltered time (i.e. report actual time worked) as opposed to filtered time worked (i.e., underreporting and sign-off behaviors). The second process deals with auditors' choice to engage in underreporting as opposed to sign-off behaviors. The third process deals with auditors' choice to reduce or overrule some audit procedures based on professional judgment. Data were collected using an …

Interpretation 101-3 of the AICPA Code of Professional Ethics provides four independence requirements for certified public accountants performing bookkeeping services. As such, these requirements are largely thought of as rules requiring compliance. The purpose of this study was to provide empirical evidence related to the question, "Can the guidelines in Interpretation 101-3 be effectively interpreted?" Accordingly, the research objectives were twofold: (1) to make an estimate of the effectiveness of independence discrimination resulting from the use of Interpretation 101-3 , and (2) to identify variables related to differences in CPAs' judgements of impairment and non-impairment of CPA independence in situations covered by Interpretation 101-3. The research methodology for this study was based on a case approach. Twelve situations developed from analysis of Interpretation 101-3 and discussions with practitioners were organized into twenty-four cases in which a CPA firm provided a variety of accounting services. These twenty-four cases were divided into two case sets of twelve cases each and then combined with two cases from a previous study by David Lavin. These cases were submitted to an expert panel for validation as to their relationship to Interpretation 101-3, and a predetermined "correct" judgement was established for use in analysis. A mail …

The Taxpayer Service Division contributes to the Internal Revenue Service mission of achieving the highest possible voluntary compliance with the Federal income tax law by answering questions and helping taxpayers in their return preparation efforts. These services are provided by Taxpayer Service Representatives and Taxpayer Service Specialists (TSS's). The TSS position was established in 1975 to upgrade the quality of assistance provided. TSS duties include being able to provide assistance with problems involving complex areas of the tax law. The purpose of the study was to disclose to what extent TSS's are called on to answer tax questions related to partnerships, corporations, and Subchapter S corporations and to disclose whether they have been trained and are able to answer the inquiries.

The development of adequate performance evaluation techniques for appraising foreign subsidiaries and their managers in an environment different from their domestic ones has been suggested as an area where management accounting should be extended. This study concerned the performance evaluation of foreign subsidiary managers with the following objectives: (1) to examine the relationships among environmental factors and foreign subsidiary performance, (2) to develop a multinational enterprise (MNE) environmental model to evaluate the performance of subsidiary managers on the basis of controllable factors only, and (3) to test the model in American multinational enterprises for the existence of association among environmental factors and measured performance of foreign subsidiaries. The research method employed in this study was to test for association between noncontrollable environmental factors of a particular foreign country and measured performance of the foreign subsidiary (in terms of ROI) in that particular country. Major noncontrollable factor groups used were economic, political-legal, educational, and social environmental constraints.

The purpose of this thesis was to analyze a number of auditor change and other peripheral issues from two related perspectives. Empirical data were gathered from publicly available Forms 8-K and 10-K to first assess whether meaningful differences existed between NYSE, AMEX, and OTC registrants regarding disclosures required in those documents. Secondly, the data were analyzed to determine whether differences existed with respect to the accounting firms (Big Eight or non-Big Eight) involved in the auditor changes. In most of the tests designed to achieve these purposes, statistically defensible results were obtained using the nonparametric chi-square test for significance of observed differences and the McNemar test for significance of changes, at the .05 level.

Organizations invest in team-based systems in order to generate innovative practices that will give them a competitive edge. High-performing teams require training and other support systems to gain the skills they need as well as to create and maintain an environment conducive to their success. The challenge for managers is to make resource allocation decisions among investment alternatives to maximize team effectiveness and still ensure a financial return for company investors. This study has three objectives. The first objective is to investigate whether there is a positive relationship among organizational environment, team potency (the team's collective belief it will succeed) and team performance. Results indicate that the presence of four organizational support systems influences team potency and performance. These support systems are the Design and Measurement, Rewards, Training and Communications Systems. In addition, results indicate that team potency is a mediating variable between the Design and Measurement and Communications Systems and team performance. These results suggest that companies are able to influence team performance by investing in environmental support systems. The second objective is to examine whether team members and managers view the organizational environment differently. Results indicate that managers view the Training and Communications Systems as more important, while …

The purpose of this study was an empirical investigation of the factors considered by the United States Tax Court in determining whether the principal purpose for an acquisition was tax avoidance (or alternatively, given the totality of the surrounding circumstances, whether there was an overriding business purpose for the acquisition).

This research investigates the information content of the translation information resulting from exchange rate fluctuations. Two hypotheses are examined. The dollar movement hypotheses investigate whether there is a positive relationship between security valuation and the translation information and whether the market assigns different weights to translation gains and losses in both the depreciating and appreciating exchange rate environments. The geographic concentration hypothesis tests whether the market's response to the translation information is geographically sensitive. Prior research on SFAS No. 8 and SFAS No. 52 has concentrated on the price and trading volume responses to the deliberations and issuance of these two accounting statements. Soo and Soo (1994) examine the long-term effect of the disclosure requirement under SFAS No. 52 on MNEs' security prices from 1981 to 1987. However, they fail to address two important issues pertinent to the MNE research--the effects of exchange rate changes and the geographic concentration. The dollar movement hypotheses provide strong evidence that under both the appreciating and depreciating exchange rate environments, a positive relationship exists between security returns and the translation information when MNEs disclose translation losses in stockholders' equity. The findings also provide evidence for a positive or at least non-negative relationship between security …

With the current strain on the world's material resources and the increase in their cost, a constant pressure is building to increase the productivity of human resources. Adding, to the strain is the increasing demand of society for a higher quality of life through more meaningful work. Responding to both of these pressures requires decisions that simultaneously meet the goals of organizations and the needs and values of employees. To make the kind of decisions demanded by this dual priority of human effectiveness and improved quality of life, information is needed to: 1. Improve understanding of the nature and scope of human resource expenditures; 2. Improve selection, retention, and motivation of employees; 3. Allocate money spent on human resources; 4. Overhaul the approach to communication among managers, between managers and other employees, and between the organization as a whole and outside parties; 5. Expand the scope of internal and external reports to deal with social as well as financial accomplishments. The ultimate objective of this research is to develop a human resource model and a heuristic for developing empirical support which can be useful to businessmen seeking to increase human effectiveness and improve the quality of life. The model merges …

Both revenues and earnings of diversified firms are increasingly being reported, to the government and the public, on a subentity basis. Adequate criterial foundations do not exist to permit the effective general prescription of specific segment delineations, nor is it known whether such criterial assists can be usefully developed.Demands for segmentation in financial reports are currently intense. Actual reporting practices are largely nonstandardized as to either the definition of segments employed or, the disclosure modes used to present them. Neither conceptual nor theoretical supports are now adequate in guidance to the forms and levels of segmentation activity now required. Prerequisite to effective development of such supports is an-adequate understanding of the corporate diversification phenomenon itself. This dissertation project investigates and analyzes the nature of corporate diversification, as manifested in (1) its historical evolution; (2) general comprehensions of the phenomenon, as evidenced in published opinions and conceptual reasoning schemes of both authoritative experts and lay investors; and (3) formal research by others. Additionally, the results of these investigations and analyses are developed into conceptual schemes and theoretical frameworks, at moderate levels of abstraction.

The purpose of this dissertation is to develop a theory that helps explain the conditions under which firms select certain project evaluation techniques. This study uses contingency theory to analyze the impact of environmental uncertainty on the choice of project evaluation techniques. In addition to a direct measure of uncertainty, several dimensions of uncertainty are included in this study. These dimensions of uncertainty include control structure, method of financing, foreign assets, method of growth, and product domination. This study also analyzes the use of project evaluation, management science and risk management techniques in US firms over time and in UK firms over time in order to compare to prior research. A comparison of firms in the two countries are also provided. The primary method of data collection was a survey instrument. Data were also collected from annual reports and various other public sources. The variables that appear significant in the choice of project evaluation technique in US firms are environmental uncertainty, control structure, method of financing, foreign assets, and product domination. The variable that appear significant in the choice of project evaluation technique in UK firms is method of financing. US firms favor discounted cash flow techniques although this study …

This study extends a research stream calling for further research regarding pricing and accounting feedback. Marketing executives rely heavily on accounting information for pricing decisions, yet criticize accounting feedback usefulness. To address this criticism, this research integrates the cognitive psychology and accounting literature addressing feedback effectiveness with pricing research in the marketing discipline. The research extends the scope of previous accounting feedback studies by using a control group and comparing two proxies of subject task knowledge; years of pricing experience and a measure of the cognitive structure of pricing knowledge. In addition, this research manipulates task complexity by using two different accounting systems. These systems vary in the number of cost pools used in allocating overhead, resulting in differentially projected cost and profit information. A total of 60 subjects participated in a computer laboratory experiment. These subjects were non-accountants with varying amounts of pricing knowledge. Subjects were randomly assigned to six experimental groups which varied by feedback type (no accounting feedback, outcome feedback only, or a combination of outcome and task properties feedback) and task complexity (high or low number of overhead cost pools). The subjects attempted to (1) maximize profits for a product during 15 rounds of pricing decisions, …

This study examined whether three reserve-based quantity replacement measures and three reserve-based value replacement measures have incremental information content beyond that of historical earnings and its cash and accrual components. This study also examined whether the cash and accrual components of earnings have incremental information content beyond that of earnings.

This study examined the impact of the ceiling test write-off on the stock prices of affected full cost (FC) oil and gas firms.