Category Archives: Accounting Issues

Shared Illusion

This idea that earnings management, represented by smoothing earnings, can somehow be a good thing, as here: …firms may smooth reported net income for external reporting purposes. If used responsibly, smoothing can convey inside information to the market by enabling … Continue reading

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Ball and Brown

Seminal study in accounting research. Published in 1968, using data from 1957 to 1965. Ray Ball and Philip Brown, “An Empirical Evaluation of Accounting Income Numbers“, Journal of Accounting Research (Autumn, 1968), pp. 159-178. Basic idea being that if income … Continue reading

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Accounting Relevance II

They don’t know Like I know Previous queries in relation to whether accounting information is all that relevant to investment decisions. Then to W.R. Scott, Financial Accounting Theory (7th ed.) and (at p. 154): …it does seem that accounting information … Continue reading

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Melancholy Fog

From Peter Morton, “At SEC, a modern Texas ranger hunts down the bad guys”, National Post, January 9, 1999, pp. C1, C4, in relation to Walter Schuetze: WASHINGTON–The sun never shines into the eighth-floor office of Walter Schuetze and that … Continue reading

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Conceptual Revision

So many speaking for a need for a conceptual framework in accounting. Something like a constitutional document, providing one with the first principles in accounting, from which others may be deduced or evaluated deductively. Needing the first principles in order … Continue reading

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All but fair

In relation to “All in the taking“, concerning accounting principles being interpreted on the border, similar to the Criminal Code or the Income Tax Act, the issue was raised as to how auditors could be found at fault, when the … Continue reading

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All in the taking

Concerning the “principles-based = Canada = good” versus “rules-based = United States = bad” dichotomy, in relation to financial accounting standards, which may well be mythical, it seems that managerial attitudes remain the missing trigger. Whether any accounting principle, like … Continue reading

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