A Good Theory

By Bloom, Robert | The Government Accountants Journal, Summer 1997 | Go to article overview

A Good Theory


Bloom, Robert, The Government Accountants Journal


Theory of Accounting and Control by Shyam Sunder South-Western Publishing Cincinnati, Ohio, 1997 212 pages

Dealing with the role of accounting and control in organizations and society, this book attempts to link together the functions of accounting into a coherent framework. The author is the Richard M. Cyert Professor at Carnegie Mellon's Graduate School of Industrial Administration. Contract theory in accounting, which is the focus of the book, views organizations as "sets of contracts among individuals..." Sharing information among those individuals helps to execute the contracts. Additionally, control represents a form of equilibrium among the participants in organizations. All such entities can be considered "games of incomplete information."

Part I provides an introduction to accounting inthe context of contracting. Part II deals with what Sunder calls the "microtheory" of accounting, including: contracting for managers, the role of managers in accounting decisions, the management of income, accounting policy decisions and investors, accounting and the stock market, and the role of auditors. Part III is concerned with what the author terms the "macrotheory" of accounting, including social decision criteria, standardization of accounting,the role of the government as a contracting agent and "superfirm," and accounting for public-good organizations.

Organizations are composed of individuals who provide services and seek compensation in return. These individuals may conflict in pursuing their own self-interests. Accounting serves to emphasize cooperation rather than conflict among individuals by measuring and reporting their contributions and entitlements. Contracts between shareholders, managers, workers and customers take various forms. Accounting is concerned with all of those contracts.

Accounting systems generate data on the performance of managers, which is also monitored by investors and auditors. Income to large firms, in particular, serves to reward managers and to encourage them to "manage income" in their own self-interests.

Shareholders represent a second key group of contracting agents, whose resource entitlements constitute a residual and whose contractual rights are transferable.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Good Theory
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.