Showing papers on "Accounting period published in 1968"
TL;DR: In this paper, the question of whether certain accounting methods generate earnings estimates which are more useful to outside investors than those generated by other accounting methods has been raised, but these opinions are only hypotheses, unsupported by evidence or well-knit theory.
Abstract: Accounting measures or "estimates" of a firm's earnings over a given interval of time (accounting period) are considered to have informational content to the extent that they signify the progress of the firm over that period. Managements of large firms probably do not rely on these accounting measures as much as they once did because of their increased awareness of the inherent limitations and biases of these measures for decision-making purposes and their access to better information. Nevertheless, the present and prospective stockholders of large firms, especially those who play little or no role in management policy making, still tend to rely heavily on these accounting measures in deciding whether to buy, sell, or hold shares in these firms. The apparent reason is that these "outside" investors have little access to "hard" information about the firm's present and future prospects other than these measures. In view of this situation, a question of significant interest emerges, one which has concerned the accounting discipline for some time, especially in recent years. The question is: Do certain accounting methods generate earnings estimates which are more useful to outside investors than those generated by other accounting methods? Several accountants have some strong opinions concerning this question, but these opinions are only hypotheses, unsupported by evidence or well-knit theory.'
5 citations