Collusion and non-controllable cost allocation

Article Abstract:

While most cost accounting textbooks recommend that a manager's evaluation should be confined to performance aspects that he or she can control, many companies continue to allocate non-controllable costs to various departments for internal decision and control purposes. A possible explanation for this inconsistency is that traditional concepts of responsibility accounting cannot be applied in a straightforward manner in the real world if there is some possibility of collusion among agents. Situations in which agents might have an incentive to collude in their action choices are analyzed. Includes discussion of the article by Bharat Sarath.

Cost accounting

---

Operating decisions and the disclosure of management accounting information

Article Abstract:

The ways in which operating decisions can be used as an alternative to direct disclosure of information are examined. Data used in making a decision to retain or replace a factor of production are inexactly inferred by outsiders. Normally, such data would be produced by the firm's internal accounting system and would therefore be considered proprietary. The conditions under which the optimal decision making is altered by the existence of this alternative to direct disclosure are identified. A discussion of this article by Brett Trueman is included.

Decision-making, Decision making

---

Ranking of accounting information systems for management control

Article Abstract:

A two-person, single-period agency model is used to determine a simple measure applicable to certain classes of rank information systems. The measure is obtained through a restriction of the agent's beliefs or preferences and permits ranking of any information system. This principal-agent model focuses on information's role as steward by illustrating the definition of likelihood ratio's variance through the signal's sensitivity and precision functions under conditions of certain separability.

Models, Management information systems, Agency (Law), Ranking and selection (Statistics)

Similar abstracts:

• Abstracts: Adjustment costs and capital asset pricing. Information, asset prices, and the volume of trade. The geometry of the maximum likelihood estimator of the zero-beta return
• Abstracts: Concentration and competition in banking. Meeting the needs of multinational corporations
• Abstracts: An explanation for accounting income smoothing. Determinants of auditor change in the public sector. Selecting experimental and comparison samples for use in studies of auditor reporting decisions
• Abstracts: Divisional versus company-wide focus: the trade-off between allocation of managerial attention and screening of talent

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.