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March 18, 2026The Accounting Review

Accounting Consistency- Key to Stockholder Information.

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Authors

AMAndrew M. McCosh

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Overview

Analysis demonstrates the impact of accounting policy consistency on earnings accuracy, suggesting significant advantages for stockholders.

Key Points

  • The aim is to assess how different sets of accounting policies affect the interpretation of economic events and earnings accuracy.
  • Compared fluctuations in earnings under different accounting policy sets using the index of determination.
  • Applied statistical tests to evaluate the similarity of earnings results between consistent and inconsistent firms.
  • Classified firms into consistent, moderately inconsistent, and markedly inconsistent categories.
  • Consistent firms showed significantly higher indices of determination compared to moderately inconsistent firms.
  • Moderately inconsistent firms demonstrated higher indices than markedly inconsistent firms.
  • Accurate earnings per share results were achieved with consistent application of diverse accounting policies.

Cite This Study

Andrew M. McCosh (1967) studied this question.

synapsesocial.com/papers/69ba421b4e9516ffd37a217bhttps://doi.org/10.2308/tar-4511770
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Consistency Reexamined.1968
  2. 2The Incidence and Nature of Consistency Exceptions.1969
  3. 3WHAT DOES 'CONSISTENT' MEAN IN THE SHORT FORM REPORT?1948
  4. 4Characteristics of Firms Reporting Consistency Exceptions--A Cross-Sectional Analysis.1977
  5. 5Do Consistency Modifications Provide Information to Equity Markets?1992