Economic determinants of accounting policy choice: the case of current cost accounting in the UK
Research output: Contribution to journal › Article
This study seeks to identify economic and financial characteristics that distinguish three groups of companies classified by response to the U.K.'s mandatory CCA standard (SSAP 16) as loyal compliers, early defectors and hard-line noncompliers. Three major explanatory variables emerge – leverage, firm size, and the fixed assets to total assets ratio. Overall results suggest that a major motivation for compliance was lower income reporting, especially as an argument for continuing recognition of CCA for tax and regulatory purposes. The belief that noncompliance was largely motivated by preparation costs is discounted.
|Number of pages||28|
|Journal||Journal of Accounting and Economics|
|Publication status||Published - Mar 1992|