Abstract
In Chapter 2 both the objectives of financial reporting and the users of financial accounting information were introduced. A broad definition of the overall objective of financial reporting was identified as ‘the provision of information to various user groups for the purposes of making economic decisions’. As there are a variety of external (and internal) user groups each with specific needs which sometimes overlap and sometimes conflict, an addition was made to the above objective in accordance with the suggestion of May and Sundem, i.e., ‘with the objective of maximisation of social welfare’.1
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Notes and References
Y. Ijiri, Theory of Accounting Measurement, Studies in Accounting Research, No. 10 (American Accounting Association, 1975) p. 28.
Ibid., preface p. ix.
There are also two other forms of the EMH, the weak form in which security prices are said to reflect all past information on security price movements, and the strong form in which security prices are said to reflect all information relevant to the security, whether publicly available or not. Further references to the EMH and its relevance to financial reporting may be obtained by consulting S. M. Keane, Stock Market Efficiency (Oxford: Philip Allan, 1983).
For further discussion, see S. Zeff, ‘The Rise of “Economic Consequences”’, The Journal of Accountancy, vol. 146, no. 6, Dec. 1978, pp. 56–63. Reprinted in Bloom and Elgars, Accounting Theory and Policy, pp. 152–62.
J. R. Hicks, Value and Capital, 2nd edn (Oxford: Clarendon Press, 1946) p. 172.
For a readily accessible resumé by Fisher, see I. Fisher, ‘Income and Capital’, in R. H. Parker and G. C. Harcourt (eds), Readings in the Concept and Measurement of Income (The University Press, Cambridge, 1969) pp. 33–53.
See, for example, E. O. Edwards and P. W. Bell, The Theory and Measurement of Business Income (Berkeley: University of California Press, 1961).
See L. Revsine, Replacement Cost Accounting (Englewood Cliffs, NJ: Prentice-Hall, 1973).
See R. J. Chambers, Accounting, Evaluation and Economic Behavior (Englewood Cliffs, NJ: Prentice-Hall, 1966).
Accounting Standards Steering Committee, ‘Disclosure of Accounting Policies’, SSAP No. 2 (1971).
E. S. Hendriksen, Accounting Theory, 4th edn (Homewood, Illinois: R. D. Irwin, 1982) p. 64.
Ibid., p. 65.
Ibid., p. 83.
R. R. Sterling, Theory of the Measurement of Enterprise Income (Lawrence: University Press of Kansas, 1970) p. 259.
M. Moonitz, The Basic Postulates of Accounting, Accounting Research Study No. I (AICPA, 1962).
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© 1985 Robin John Limmack
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Limmack, R.J. (1985). Accounting Principles and Practice. In: Financial Accounting and Reporting. Palgrave, London. https://doi.org/10.1007/978-1-349-17898-8_3
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DOI: https://doi.org/10.1007/978-1-349-17898-8_3
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