Accounting in the Dual Economy

(Hardback)

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In recent years, the accounting profession has been faced with a number of unresolved problems, among which is the failure to distinguish between two separate sectors of the economy - the core and the periphery. This work offers a study of this "dual economy" in which large organizations are clustered at the centre while smaller ones are arrayed on the periphery. The authors argue that at least two sets of accounting standards are required to serve this structure adequately, and here they examine these standards and how they would affect such issues as financial reporting. The work explores the nature of the dual economy and provides a perspective on the way in which the concept operates. A survey of its theories and implications, and the issues of accounting validation in such a structure, is followed by analysis of some accounting problems and their relation to economic dualism, including income-smoothing, auditor-switching and bond rating changes. The book ends with an examination of public policy and standard-setting solutions to the dual economy situation.

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Janice Monti-Belkaoui and Ahmed Belkaoui examine economic dualism, the identification of two separate sectors of the economy--a core sector and a peripheral sector. Although other studies have substantiated the dualism theory, this analysis emphasizes accounting data from the firm rather than that of the industry. Using data from Compustat tapes for the period 1968 to 1988, the authors compare accounting variables relating to capital structure, liquidity, profitability, turnover, price-earnings, and market risk to verify the dualism thesis. The study includes chapters on income smoothing, auditor switching, bond-rating changes and accounting changes, and standard setting. The level of presentation demands that readers have a knowledge of the subject matter, accounting theory, and quantitative measurement techniques. Footnotes and a selected bibliography conclude each chapter. This research study is recommended for upper-division undergraduate and graduate students.-Choice
"Janice Monti-Belkaoui and Ahmed Belkaoui examine economic dualism, the identification of two separate sectors of the economy--a core sector and a peripheral sector. Although other studies have substantiated the dualism theory, this analysis emphasizes accounting data from the firm rather than that of the industry. Using data from Compustat tapes for the period 1968 to 1988, the authors compare accounting variables relating to capital structure, liquidity, profitability, turnover, price-earnings, and market risk to verify the dualism thesis. The study includes chapters on income smoothing, auditor switching, bond-rating changes and accounting changes, and standard setting. The level of presentation demands that readers have a knowledge of the subject matter, accounting theory, and quantitative measurement techniques. Footnotes and a selected bibliography conclude each chapter. This research study is recommended for upper-division undergraduate and graduate students."-Choice

Author Bio

JANICE MONTI-BELKAOUI is Chairperson of the Department of Sociology, History, and American Studies at Rosary College in Illinois. She has authored or co-authored a number of journal articles, which have appeared in the Journal of Psycholinguistic Research and Journalism Quarterly, among others. AHMED RIAHI-BELKAOUI is Professor of Accounting at the University of Illinois at Chicago. He is the author of more than twenty books on finance and accounting, including Multinational Financial Accounting (Quorum, 1991), Cost Accounting: Theory and Practice (Quorum, 1991), and Judgment in International Accounting (Greenwood Press, 1990).