Inventory accounting policy choice among Canadian firms

Archambault, Jeffrey J.; Archambault, Marie

doi:10.1016/1061-9518(94)90014-0

Cited by 8 publications

(4 citation statements)

References 9 publications

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“…12. Such studies are for example: Hagerman and Zmijewski (1979), Zmijewski and Hagerman (1981), Daley and Vigeland (1983), Morse and Richardson (1983), Lee and Hsieh (1985), Hunt (1985), Penno and Simon (1986), Cushing and Leclere (1992), Kuo (1993), Skinner (1993), Archambault and Archambault (1994), Cullinan and Knoblett (1994), Bowen et al (1995), Inoue and Thomas (1996), Craycraft et al (1998).…”

Section: According Tomentioning

confidence: 99%

Economic Determinants of Multiple Accounting Method Choices in a Swiss Context

Missonier-Piera¹

2004

Financ Manag Account

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This article investigates economic determinants that may affect multiple accounting method choices made by Swiss listed companies. It intends to make a contribution to the accounting choice literature for at least four reasons. This is, to our knowledge, the first study to investigate the economic determinants of Swiss accounting method choices. Second, Swiss firms provide an interesting sample for testing accounting method choices because they can choose from a much wider range of accounting methods than their American counterparts. Third, this study examines the balance sheet effect as well as the income statement effect. Lastly, multiple accounting methods are used instead of individual choices. The empirical results exhibit that income-accelerating accounting method choices is positively associated with the recourse to bank and private loans, the extent of assets specificity and the ownership dilution of the firm and negatively with labour force. Additionally, firms that select leverage-ratios decreasing accounting methods, make higher recourse to debt and especially bank loans to finance their activities and exhibit a higher proportion of specific assets than other corporations. Overall, this result suggests that in a Swiss context, managers may select accounting methods to decrease both debt and political costs as well as to increase their own compensation to some extent.

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Section: According Tomentioning

confidence: 99%

Economic Determinants of Multiple Accounting Method Choices in a Swiss Context

Missonier-Piera¹

2004

Financ Manag Account

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“…For example, in the United States most policy choice research has found a relationship between accounting policy choices and both firm size and leverage (e.g., Watts and Zimmerman, 1986;Bowen et al, 1995;Dhaliwal, Henniger, and Hughes, 1999). In contrast, Canadian accounting choice studies have usually found no relationship between accounting choices and firm size (e.g., Booth and Rotenberg, 1991;LaBelle, 1990;Arcelus and Trenholm, 1991;Archambault and Archambault, 1994). Canadian-based testing of the debt covenant hypothesis has produced more mixed results, with some studies finding a relationship between leverage and accounting choice (e.g., Rotenberg, 1989), and other studies finding no significant relationship (Cullinan, 1999).…”

Section: Accounting Policy Research In the United States And Canadamentioning

confidence: 99%

The Effects of Labour on Accounting Choice in Canada

Cullinan

Bline

2003

Canadian Accounting Perspectives

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This study examines the effects of labour considerations on accounting choice in Canada. Two potential labour‐related incentives are considered: ability to pay and employee attraction and retention. Measures of these incentives are developed based on Canadian data: unionization for ability‐to‐pay incentives, and labour intensity and the percentage of white‐collar employees for the attract and retain incentives. Our results indicate that ability‐to‐pay incentives, measured by unionization, are not associated with depreciation policies in Canada. In contrast, the findings provide mixed support for the attract‐and‐retain perspective, because labour intensity was significantly correlated with these choices, while the percentage of white‐collar employees was marginally significant.

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“…Warsame and Thornton (1998) use an unlevered tax rate "whereby tax expense is divided by net income before taxes, adjusted for both debt and investment-related tax shields" (p.18). Archambault and Archambault (1994) use average tax rates, while Day and Devlin (1994) use statutory tax rates to proxy for marginal tax rates. Shum (1996) acknowledges that actual taxes paid by firms is a censored variable, and therefore estimates a latent (taxes paid) variable as a function of the following exogenous variables: operating income, interest expense, book value of depreciation and amortization, the loss carry-forward benefit realized in the current year, and eleven industry dummy variables.…”

mentioning

confidence: 99%