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Transaction Theory Stochastic Processes and Derived Accounting Measurement


Willett, RJ, Transaction Theory Stochastic Processes and Derived Accounting Measurement, Abacus: A Journal of Accounting, Finance and Business Studies, 27, (2) pp. 117-134. ISSN 0001-3072 (1991) [Refereed Article]

Copyright Statement

Copyright 1991 Wiley-Blackwell Publishing Asia

DOI: doi:10.1111/j.1467-6281.1991.tb00262.x


The purpose of this paper is to demonstrate how the axiomatic theory of transaction cost measurement described in Willett (1987, 1988) can be used to determine precisely what accounting numbers represent. By a method of analysis supplemented with simulation experiments, transactions theory is shown to have a unifying character bringing together aspects of stochastic cost-volume-profit analysis, research into the distributional properties of accounting numbers, and income theory. The unifying character of transactions theory is due to the cost and production structures on which it is based being sufficient to describe accounting numbers of any complexity. The consequences of transactions theory are wide. Descriptions of accounting numbers as stochastic variables and statistical criteria for choice of income measurement arise naturally. The theory is a self-contained conceptual framework for understanding the measurement problem in accounting which does not depend upon the concepts of rational decision making and restrictive assumptions about market structures.

Item Details

Item Type:Refereed Article
Research Division:Commerce, Management, Tourism and Services
Research Group:Accounting, auditing and accountability
Research Field:Accounting theory and standards
Objective Division:Economic Framework
Objective Group:Measurement standards and calibration services
Objective Field:Service industries standards and calibrations
UTAS Author:Willett, RJ (Professor Roger Willett)
ID Code:100580
Year Published:1991
Web of Science® Times Cited:6
Deposited By:TSBE
Deposited On:2015-05-20
Last Modified:2015-06-09

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