* University of New South Wales; tStanford University. This paper benefited from comments of participants in workshops at Baruch College CUNY, Cornell University, Monash University, Stanford University, University of Chicago, University of New South Wales, University of Pennsylvania, University of Rochester, and Washington University. A special thanks is due to detailed criticisms from G. Biddle, S. Datar, L. DeAngelo, P. Dodd, N. Dopuch, J. Elliott, N. Gonedes, C. Horngren, M. Jensen, A. Kirby, R. Leftwich, J. Magliolo, R. Morris, C. Purvis, K. Schipper, D. Shores, R. Watts, G. Whittred, M. Wolfson, and J. Zimmerman. Foster's contribution was sponsored by the Stanford Program in Accounting, contributors to which are: Arthur Andersen & Co.; Arthur Young & Company; Coopers & Lybrand; Deloitte Haskins & Sells; Ernst & Whinney; Peat, Marwick, Mitchell & Co.; and Price Waterhouse & Co. 1 Buchler [1961, p. 125] distinguishes "method" and "methodology" in these terms:"... in the broadest sense 'methodological' questions are those dealing with methods as their subject matter, questions pertaining to the origin, scope, nature and relative value of methods." Webster's Third New International Dictionary defines method as "a procedure or process for attaining an object ... a particular approach to problems of truth or knowledge." Methodology is defined as "a body of methods, procedures, working concepts, rules and postulates employed by a science, art or discipline ... a science on the study of method." We take "research methods" to include the selection of dependent and independent variables, sample selection, choice of functional forms, experimental controls, statistical inference, etc.

Corporate Financial Reporting: A Methodological Review of Empirical Research

This article examines the decision making processes of professional financial analysts who are screening prospective investments. The analysts were provided with a package of financial materials that reflected the magnitude and the types of information that they normally review. They were asked to verbalize “whatever came to mind” during their evaluation. The resulting transcripts, called protocols, formed the basis for the analysis. The protocol analysis produced a descriptive model of the financial screening process, including the identification of the decision making processes, the decision rules, and the types of knowledge that are required to perform the task. Particular attention is given to factors that differentiate among individual analysts.

How do financial analysts make decisions? A process model of the investment screening decision

Perceptions and characteristics of financial statement users in developing countries: Evidence from Iran

The main purpose of this paper is to examine the cost constraints on voluntary information disclosure in a comparative study of the perceptions of financial executives in U.K. and U.S. multinationals. The study examines the perceived net costs or benefits of disclosing information voluntarily, the types of costs involved and the significance of cost constraints in respect of specific items of disclosure. The results suggest that while there is substantial agreement on the major cost constraints involved and the individual items giving rise to major net costs, there are significantly different perceptions by U.K. and U.S. financial executives in terms of the overall emphasis of responses to the issue of cost constraints on voluntary information disclosures.

International Perceptions of Cost Constraints on Voluntary Information Disclosures: A Comparative Study of U.K. and U.S. Multinationals

The major purpose of a corporate annual report is to convey information about the company's affairs to outside parties. The information can be used both to monitor agency relationships (Jensen and Meckling [25]; Watts [32]) and to provide inputs into user decision models (e.g. Altman [3]). Until recently, however, very little research had been conducted into annual reports in the U.K. and hence little was known about their effectiveness. This has been remedied, to some extent, in the last few years and there is now a growing body of literature relating to annual reports. For example, the major professional British accounting bodies commissioned a study to examine‘the scope and aims of published financial reports in the light of modern needs and conditions’. This resulted in the publication of The Corporate Report (ASSC [1]), a document which recommended a number of radical changes. Other studies have investigated the degree of understanding of annual reports by private shareholders (Lee and Tweedie [26]), the degree of consensus about the usefulness of annual report data (Firth [21]), the actual degree of disclosure by British companies (Firth [22, 23]), and the impact of accounting information on share prices (see Firth [20]).1 The purpose of this paper is to add to the literature by reporting the results of an empirical study which examined one aspect of the corporate reporting policies of British firms, namely the changes in the quality and extent of voluntary financial disclosure when raising finance in the stock market.

Melvin N. Greenball

Papers

Management Reluctance to Disclose: An Empirical Study