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Conceptual Foundation for Human Resource Accounting

Description: 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 several previously unrelated theories dealing with human resources and in the process contributes some new concepts.
Date: May 1974
Creator: Flowers, Vincent S.

The Origination and Evolution of Double-Entry Bookkeeping to 1440

Description: The problem of this investigation is that of determining how double entry bookkeeping originated and evolved during the thirteenth, fourteenth and fifteenth century in mediaeval Italy and its influence on capital formation. The methodology of this study included the use of both primary and secondary sources of information. Great reliance was placed upon a direct examination of original documents found mainly in the State Archives of Genoa, Florence, Milan and Venice. Because this is basically a historical research, particular emphasis was given to the study and criticism of economic, political and religious conditions that most likely had a considerable influence on the creation and evolution of bookkeeping techniques and methods.
Date: May 1974
Creator: Martinelli, Alvaro

Segment Definition for Financial Reporting by Diversified Firms

Description: 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.
Date: May 1974
Creator: Bostrom, Donald E.

Income Concepts Used by Bank Loan Officers in a Metropolitan Environment

Description: The problem with which this study is concerned is that of the income concepts used by bank loan officers in dealing with financial information, as compared to the income concepts used by the accounting profession. A series of twenty different financial situations were designed which required the loan officer to make a decision as to an income concept before he could compute the answer to the questions in income, profit, gain, and change in wealth which were asked for in each situation. The loan officers' answers to each situation were then compared with the accountants' answers, using generally accepted accounting principles. In addition, comparisons were made between the income concepts used by the different classes of loan officers and sixteen environmental factors to determine what influence, if any, these factors might have on the answer given by the bank loan officers. The two purposes of the study were to show that bank loan officers do not calculate net income by the same methods as accountants, and to determine if there are environmental factors which would influence the method the loan officer used to compute his answers.
Date: August 1974
Creator: McGillivray, Robert E.

The Association Between the Establishment of Audit Committees Composed of Outside Directors and a Change in the Objectivity of the Management Results-Reporting Function: an Empirical Investigation Into Income Smoothing Patterns

Description: The purpose of this research was to empirically examine the effect of the establishment of outside audit committees on the objectivity of the management results-reporting practices of those companies that established such committees in response to the New York Stock Exchange mandate effective June 30, 1978. Management income smoothing behavior is taken as a measurable surrogate for the objectivity of the management results-reporting practices. This research involved the testing of one research problem. The research question asks, "Will the establishment of outside audit committees by companies that had no such committees prior to the New York Stock Exchange mandate effective June 30, 1978, be associated with a decrease in the degree of smoothing in the net income series for the period after that date relative to the degree of smoothing prior to that date?" The answer to this question required the selection of an experimental and a control group. Each group was composed of fifty New York Stock Exchange listed firms. Linear and semi-log regression models were used to measure each firm's degree of income smoothing (defined as reducing the variability of a net income series about its trend line). The change in mean square errors of the experimental and control groups was compared using the chisquare and median tests. Neither the chi-square or the median test found a statistically significant increase in the objectivity of the management results-reporting function for the firms that established outside audit committees in response to the NYSE mandate effective June 30, 1978.
Date: December 1985
Creator: Roubi, Raafat Ramadan

An Empirical Investigation of the Discriminant and Predictive Ability of the SFAS No. 69 Signals for Business Failure in the Oil and Gas Industry

Description: In 1982, the Financial Accounting Board (FASB) issued Statment of Financial Accounting Standards No. 69 (SFAS No. 69) which required oil and gas producing companies to disclose supplementary information to the basic financial statements. These disclosures include, costs incurred, capitalized costs, reserve quantities, and a standardized measure of discounted cash flows. The FASB considered these disclosures to be necessary to compensate for the deficiencies in historical cost financial statements. The usefulness of the new signals created by SFAS No. 69, however, is an empirical question and research regarding that objective is lacking. The objective of the study is to test the usefulness of SFAS No. 69. The research strategy used to achieve that objective is to compare the discriminant and predictive power of SFAS No. 69 signals or SFAS No. 69 signals combined with financial signals to that of financial signals alone. The research hypothesized that SFAS No. 69 signals by themselves or as supplmentary to financial signals have more discriminant and predictive ability for business failure in oil and gas industry than do financial signals alone. In order to test that hypothesis, the study used the multiple discriminant analysis technique (MDA) to develop three equations. The first is based on SFAS NO. 69 signals, the second on financial statement signals, and the third on joint financial and SFAS No. 69 signals. Data were collected from the 10-K's arid the annual reports of 28 oil and gas companies (14 failed and 14 nonfailed). The analysis was repeated for four time bases, one year before failure, two years before failure, three years before failure, and the average of the three years immediately before failure. After assessing the discriminant and predictive ability of each equation in the four time bases, a t-test was used to determine a significant difference in the discriminant ...
Date: December 1985
Creator: Eldahrawy, Kamal

An Assessment of the Effect of the Investment Tax Credit on Capital Investment in Farm Supply Cooperatives in Michigan, Minnesota, North Dakota and Wisconsin

Description: 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.
Date: May 1986
Creator: Milacek, Emil C., Jr.

A Comparative Study of Internal and External Auditors' Judgment of Internal Auditor Independence

Description: 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 relative importance of scope of internal audit service. Third, while large individual differences existed on the relative importance of the five selected factors, the degree of judgment consensus, in general, is high within each auditor group. Fourth, the internal auditor's perceived role conflict and role ambiguity were inversely related to his perceived level of professional autonomy. Finally, the internal auditors' judgments were not notably affected by the perceptions of their own organizational environment. However, as evidenced by the different types of experienced role conflict and ambiguity, the nature of these auditors' environment varied considerably, Given the above findings, the following ...
Date: May 1986
Creator: Pei, Ker-Wei

Budget-Related Prediction Models in the Business Environment with Special Reference to Spot Price Predictions

Description: The purpose of this research is to study and improve decision accuracy in the real world. Spot price prediction of petroleum products, in a budgeting context, is the task chosen to study prediction accuracy. Prediction accuracy of executives in a multinational oil company is examined. The Brunswik Lens Model framework is used to evaluate prediction accuracy. Predictions of the individuals, the composite group (mathematical average of the individuals), the interacting group, and the environmental model were compared. Predictions of the individuals were obtained through a laboratory experiment in which experts were used as subjects. The subjects were required to make spot price predictions for two petroleum products. Eight predictor variables that were actually used by the subjects in real-world predictions were elicited through an interview process. Data for a 15 month period were used to construct 31 cases for each of the two products. Prediction accuracy was evaluated by comparing predictions with the actual spot prices. Predictions of the composite group were obtained by averaging the predictions of the individuals. Interacting group predictions were obtained ex post from the company's records. The study found the interacting group to be the least accurate. The implication of this finding is that even though an interacting group may be desirable for information synthesis, evaluation, or working toward group consensus, it is undesirable if prediction accuracy is critical. The accuracy of the environmental model was found to be the highest. This suggests that apart from random error, misweighting of cues by individuals and groups affects prediction accuracy. Another implication of this study is that the environmental model can also be used as an additional input in the prediction process to improve accuracy.
Date: August 1986
Creator: Kumar, Akhil

Foreign Exchange Risk Management in U.S. Multinationals Under SFAS no. 52: Change in Management Decision Making in Response to Accounting Policy Change

Description: SFAS No. 52, Foreign Currency Translation, was issued in December, 1981, replacing SFAS No. 8, Accounting For the Translation of Foreign Currency Transactions and Foreign Currency Financial Statements. SFAS No. 52 has shifted the impact of translation gains and losses from the income statement to the balance sheet. It was expected that SFAS No. 52 would eliminate the incentive for multinationals to engage in various hedging activities to reduce the effect of the translation process in reported earnings. It was also expected that multinationals would change their foreign exchange risk management practices. The major purpose of this study was to investigate the effect of SFAS No. 52 on foreign exchange risk management practices of U.S. based multinationals.
Date: August 1986
Creator: El-Refadi, Idris Abdulsalam

Prediction of Business Failure as a Criterion for Evaluating the Usefulness of Alternative Accounting Measures

Description: This study examines the usefulness of general price level information (GPL) and current cost information (CC) originally provided by SFAS No. 33 as compared to historical cost information (HC) in predicting bankruptcy. The study also examines the usefulness of GPL data versus CC data when each supplements HC data. In addition, this study tests the usefulness of the three types of information systems combined in one model (HC, GPL, and CC) versus HC data in predicting bankruptcy. The study focuses on the predictability of business failure using financial ratios as predictors. A comparison of these predictors is made in order to identify the accounting system that yields a better prediction of bankruptcy. Two multivariate statistical techniques, multiple discriminant analysis (MDA) and logistic regression analysis (LRA), are used to derive the ex—post classification and the ex-ante prediction results. Six functions are developed, based on ratios computed with HC, CC, GPL, the combined HC and GPL, the combined HC and CC, and the combined HC, GPL, and CC. The resulting functions are used to classify 40 firms as failed or nonfailed. The analysis is repeated for three time bases—one, two, and three years before bankruptcy. The main results of the various analyses indicate that the combined HC and CC model has more discriminant power than does the HC, the GPL, or the combined HC and GPL models in each of the three years before bankruptcy. The results also show that there are significant differences in the overall classification rate derived from the combined HC, GPL, and CC model and the HC model, the GPL model, or the combined HC and GPL model . The differences between the combined HC and CC and the combined HC, GPL, and CC models are not significant in each of the three years before bankruptcy. The results ...
Date: August 1986
Creator: Aly, Ibrahim M. Mohamed

An Empirical Examination of the Effects of FASB Statement No. 52 on Security Returns and Reported Earnings of U.S.-Based Multinational Corporations

Description: Prior to the issuance of Financial Accounting Standards Board Statement No. 8 (SFAS No. 8), there was a marked inconsistency in the area of accounting for foreign currency translation. Though designed to make the diverse accounting practices of multinational corporations (MNCs) more compatible, SFAS No. 8 was the subject of a great deal of criticism, eventually leading to the issuance of Financial Accounting Standards Board Statement No. 52 (SFAS No. 52). SFAS No. 52 differs from SFAS No. 8 on objectives and method of translation, and on accounting treatments of translation adjustments. This dissertation provides an empirical examination of the security market reaction to the accounting policy change embodied in SFAS No. 52, and its impact on the volatility of reported earnings of MNCs. The effects of the issuance and early adoption of SFAS No. 52 on security return distributions were determined by both cross-sectional comparisons of cumulative average residuals (CAR) between MNCs and domestic firms and between early and late adopters, and by time-series tests on CAR of MNCs. Two volume analyses were performed to test the effects of SFAS No. 52 on security volume. The first analysis was adjusted to remove the effects of the marketwide factors on volume, and the second analysis was unadjusted for the market influences. Four nonparametric tests were used in testing the effects of SFAS No. 52 vis-a-vis SFAS No. 8 on the volatility of reported earnings of MNCs. The findings of this study led to the following conclusions: (1) SFAS No. 52 had significantly affected security returns of MNCs, but had no significant effects on security volume of MNCs; (2) the early adoption of SFAS No. 52 had no effects on security returns and volume of early adopters as opposed to late adopters; and (3) SFAS No. 52 did not have any ...
Date: December 1986
Creator: Elsayed-Ahmed, Sameh M. (Sameh Metwally)

Market Reactions to Accounting Policy Deliberations the Case of Pensions (SFAS No. 87)

Description: This study had two basic objectives. The first was to determine the stock market reactions to the pension policy deliberations. The second was to further our understanding of the significance of the FASB's due process. The author selected 13 critical events that preceded passage of SFAS No. 87 and designed a quasi experiment to examine the stock market reaction around the above events. Two portfolios were constructed to test the hypotheses. The first portfolio consisted of firms in the experimental group (firms sponsoring a defined benefit pension plan) and the second portfolio consisted of firms in the control group (firms sponsoring a defined contribution pension plan). The two portfolios were matched on the basis of SIC code, debt to equity ratio and assets.
Date: December 1986
Creator: Gopalakrishnan, Venkataraman

An Empirical Investigation of the Factors Considered by the Tax Court in Determining Principal Purpose Under Internal Revenue Code Section 269

Description: 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).
Date: May 1987
Creator: Olson, William H. (William Halver)

An Analysis of the Equity and Revenue Effects of the Elimination or Reduction of Homeowner Preferences

Description: One perceived deficiency in the tax system is its unfairness (inequity). One area in which unfairness has been alleged is the favoritism shown toward homeowners. The focus of this study was on the effects of homeowner preferences on the Federal tax system. The overall impact of homeowner preferences can be said to produce three major results—loss of revenue, reduction in horizontal equity, and reduction in vertical equity.
Date: August 1987
Creator: Hall, Bethane Jo Pierce

An Analysis of the Factors Used by the Tax Court in Applying the Step Transaction Doctrine

Description: The step transaction doctrine is one of the judicial doctrines used by the courts to interpret tax law. The doctrine requires that a series of transactions be treated as a single transaction if the transactions share a single, integrated purpose. Many authors believe there is a great deal of uncertainty as to when the doctrine will be applied. Uncertainty and inconsistency in the application of tax law add to the complexity of the law. One of the most complex areas of tax law is Subchapter C of the Internal Revenue Code, which governs corporate formations, redemptions, liquidations, distributions, and reorganizations. The purpose of this study was to determine if the step transaction doctrine is being consistently applied by the Tax Court and what variables affect the judges' decision in these cases. Hierarchical logit analysis was used to derive a full model and two restricted models. The full model was used to determine the predictive power of the variables that were identified and to explain the extent to which the individual variables affect the judges' decisions. One restricted model was used to test temporal stability. The other was used to test consistency when different issues of tax law are involved. The data source was the sample of step transaction cases involving Subchapter C issues decided by the Tax Court and its predecessor, the Board of Tax Appeals. Eight variables were identified to evaluate the factors discussed in the literature and major court cases involving the doctrine. Four of the variables were found to be statistically significant. The full model correctly predicted the outcome of 79.5 percent of the cases. The restricted model to test temporal stability correctly predicted the outcome of 86.3 percent of the cases. The restricted model to test the consistency of the decisions relating to a specific topic ...
Date: August 1987
Creator: Smith, Darlene A. (Darlene Adel)

A Critical Investigation of Positivism: Its Adequacy as an Approach for Accounting Research

Description: This dissertation addresses the influence of "positivism" in accounting research. Accounting research has been overwhelmed by "positivism" to the extent that the "scientific method" has become sacrosanct. The dysfunctional consequences include the extreme emphasis placed on methodology. Researchers believe that the methods applied, rather than the orientations of the human researcher, generate knowledge. This belief stems from an extreme objectivist ontological orientation. A second consequence of the "positivistic" influence is a change in direction of intellectual inquiries. Obsession with measurement and quantification has all but eliminated concern for values. Specifically this dissertation asserts that the "scientific method" has been misapplied and misunderstood. The misapplication is that a method developed in the natural sciences has been blindly accepted and endorsed in the social sciences. It has been misunderstood in the sense that the abstract Cartesian-Newtonian view of reality has been mistaken for reality itself. The ontological assumptions inherent in this view have become integrated in the Western mind. The axiomatic nature of these assumptions have been ignored. The primary purpose of this dissertation is to project a point concerning research and knowledge. Hence, there are no "research findings" in the conventional sense.
Date: August 1987
Creator: Eriksen, Scott D. (Scott Douglas)

The Effects of Missing Data on Audit Inference and an Investigation into the Validity of Accounts Receivable Confirmations as Audit Evidence

Description: The objectives of the thesis research were twofold. One objective was to conduct an exploratory investigation of the underlying response mechanism to an auditor's request for confirmation of accounts receivable. The second objective was to investigate the validity of confirmation evidence. Validity was defined in terms of detection of errors.
Date: August 1987
Creator: Caster, Paul, 1951-

The Impact on Charitable Classes in Dallas County, Texas, Resulting from Changes in the Tax Economics of Private Philanthropy

Description: Private philanthropy is important in America. In 1985, philanthropy totaled almost 80 billion dollars. Philanthropy is partially a function of price. Absent a tax benefit, the price of charitable giving is unity. When tax benefits are available, the price of cash giving is one minus the marginal tax rate of the donor. Philanthropy is not evenly distributed among all classes of organizations. Changes in tax cost bring about changes in the distribution of gifts among organizations. Predictions have been made of a six to twelve billion dollar decline in individual giving as a result of the Tax Reform Act of 1986. The question is, "Whose ox gets gored?" In 1962, the Internal Revenue Service collected data directly linking itemized charitable contributions to class of donee organization. Prior works by Taussig, Schwartz, Feldstein, and Clotfelter have been principally based on this data. Their works document differing elasticities of price on charitable giving. The current research gathered 1985 data on the relationships between income, price, and charitable donee for 298 Dallas County, Texas, taxpayers. Data was obtained from selected certified public accountants in Dallas County who prepared income tax returns for individuals as part of their practice. Two hundred fifty usable responses reflected charitable gifts. The data collected permitted the tax benefit resulting from charitable gifts to be calculated. Income levels and marginal tax rates on those gifts were then correlated with donee organizations using multiple regression analysis. The main effects of price and income on giving were masked by multicollinearity. The interaction effects of price and other independent variables showed little price effect on giving. Only when coupled with the income variable at income levels of $50,000 was the price effect significant.
Date: August 1987
Creator: McClure, Ronnie C. (Ronnie Clyde)

An Investigation of Asymmetrical Power Relationships Existing in Auditor-Client Relationship During Auditor Changes

Description: In recent years, considerable interest has been stimulated concerning potential conflicts of interest between a company's management and their independent auditors. Many researchers examined the association between corporations who changed their present auditors, and factors such as auditor's opinion on the financial statements, management changes, mergers, financial distress, etc. Some of these research efforts resulted in findings that were inconsistent with each other. The current research was therefore undertaken with the objective of developing a theoretical model of auditor change process and to explain the justification for considering certain specific factors that may be present in an auditor-client relationship. The research design and the methodology for analyses were developed on the basis of the theory on power conflicts found in political science literature and by the use of Wrong's power model on authority relationship. Sources of power such as the size of an audit firm, size of a corporation, the stock exchange membership, the ability of an auditor to qualify the opinion on the financial statements, the ability of the management of a corporation to terminate the audit contract following the issue of a qualified opinion, and change of a corporation's CEO were identified and converted into independent variables. Data were collected from secondary sources on a sample of 200 corporations, 100 companies that had changed their audit firm at least once during the period 1983-85, and 100 corporations that did not change their audit firm during this period. The resulting data were analyzed using the MDS-ALSCAL procedure and logit regression with maximum likelihood estimators. The findings of this research support the power model and its relevancy to the study of auditor-client relationship. The variables, client size, stock exchange membership, and audit firm size were found to have a significant association with corporations who changed their audit firms. However, the ...
Date: August 1987
Creator: Sriram, Srinivasan

Prediction of Bankruptcy Using Financial Ratios, Information Measures, National Economic Data and Texas Economic Data

Description: The main purpose of this study is to develop a bankruptcy prediction model for the small business firm. Data was collected from the Dallas Small Business Administration (SBA), making this study specific to its decision makers. Existing research has produced models which predominately use financial ratios and information measures either independently or combined, and a few research models have used economic trends. This study varies from past studies in that it includes regional economic variables from the states of Texas. A sample of three-year data for 138 firms included fifteen bankrupt firms. This proportion of bankrupt/nonbankrupt firms approximates the proportion of repayed/defaulted loans in the SBA. Stepwise regression, set at the .15 level of significance, reduced a total of fifty-three variables to nine. These nine variables were then used to test twelve predictive models. All twelve models tested improved the SBA repayment rate and only two of the twelve would have caused the SBA to deny loans to applicants who eventually repaid. The study determined the model that included financial ratios, information measures, and Texas economic variables as best. It was also demonstrated that some of the variables used in this model could be eliminated without decreasing the predictive power of the model. The best of twelve models improved the SBA default rate by 40 percent without denying a loan to any applicant that eventually repaid.
Date: December 1987
Creator: Moore, Ronald K. (Ronald Kenneth)

Venture Capital Investment and Protocol Analysis

Description: This study used protocol analysis to identify key variables in the venture capital investment decision-making process. The study used a fictional business plan which was based on six actual business plans. This fictional business plan was presented to ten venture capitalists who were asked to review it to decide whether to interview the investee. The protocols obtained from these subjects were analyzed to determine patterns within the subjects' review. The sections of the business plan which were commonly reviewed first were the deal structure, the executive summary, and the management section. The management section was used by the greatest number of subjects. The market section was used the greatest number of times. The data were also organized by type of operators used in each subject's protocols. Information Search/Retrieval operators were most common, followed by Task Structuring/Set Goal operators. When classified into the four major categories of Task Structuring/Set Goal, Information Acquisition, Analytical/ Inferential, and Choice operators, Analytical/Inferential operators were used most frequently. Choice operators were least used. The phrases were analyzed by the relevant section in the business plan. The market received the greatest number of references, followed by references to the product and to management. However, when references to the income statement and balance sheet were combined as phrases relevant to the financial statements, the financial statements were referred to more frequently than the product or the people. The subjects appeared to use an unidentified choice program within which certain models could be identified as subroutines. The subjects used an elimination-by-aspects model to screen the business plan. If the business plan met the criteria within the elimination-by-aspects model of the subject, the subject used an additive/nonlinear model for the remainder of the review. The results of this study indicate that financial statements provide information important in the venture capital ...
Date: December 1987
Creator: Pfeffer, Mary Graves

An Empirical Investigation of the Lobbying Influence of Large Corporations on Selected FASB Standards

Description: 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. The following hypotheses were tested. HO_1 There is no positive statistically significant relationship between clients' preferences and an accounting firm's support for an outcome. HO_2 There is no positive statistically significant relationship between the preferences of large corporations and standards enacted by the FASB. HO_3 There is no positive statistically significant relationship between the preferences of the Big Eight firms and the standards enacted by the FASB. These hypotheses were tested for each Big Eight accounting firms and for each standard. A logist procedure was employed. The results of the tests, with three exceptions, indicate that any relationships that occurred ...
Date: May 1988
Creator: Beckman, Ronald J. (Ronald James)