Prediction Achievement and Simulated Decision Makers as an Extension of the Predictive Ability Criterion: A Reply.

Abstract The article presents response of the author on comments made by scholars Gerald L. Salamon, Wilfred C. Uecker and Richard Simmons and James Jimbalvo on his article "Prediction Achievement and Simulated Decision Makers As an Extension of the Predictive Ability Criterion," published in the July 1975 issue of the periodical "The Accounting Review." In their comment, Salamon, Uecker and Simmons question the generality of the usefulness of the prediction achievement criterion as developed in my earlier paper. Their analysis is organized around the Report of the Committee on Accounting Valuation Bases (CAVB) . This reply will present my view of the place of the prediction achievement criterion in generalized and particularized accounting situations and compare it to that of Salamon, Uecker and Simmons and clear up some minor misunderstandings by Salamon, Uecker and Simmons of my earlier work and the position taken by CAVB. In Jiambalvo's comment, he also takes issue with the usefulness of the prediction achievement index in relation to predictive ability measures, in addition, he questions the use of the correlational measures of performance presented in my discussion of the Lens Model and suggests that estimated prediction achievement provides biased estimates of usefulness.