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University Accountancy faculty need criteria to assist with the selection of textbooks, to ensure that the subject matter is congruent with the level at which students are taught. Readability is one such criterion. The purpose of this study is to assess the readability of two Managerial Accounting and two Financial Management textbooks, using three different readability evaluation methods.

The sample for the study included 281 Accounting students from an Eastern seaboard university. Each student was requested to complete two passages – one from a Management Accounting textbook and one from a Financial Management textbook. The Gunning Fog Index, Flesch Reading Ease and Cloze Procedure readability evaluation methods were used to measure readability.

The findings suggest varying levels of readability among the textbooks. Results from the Cloze Procedure reveal that three of the four textbooks were being read at the Frustration Level and the fourth marginally above the Frustration Level. The readability formulae returned varying results demonstrating that some of the textbooks were at a level that the students ought to be able to read.

Only two Managerial Accounting and two Financial Management textbooks of many published were assessed, and only three readability evaluation methods were used.

The findings have implications for university faculty, authors, publishers, editors and students.

The readability of Managerial Accounting and Financial Management textbooks used at South African universities, has received scant attention in the literature. The analysis of the readability of the accounting textbooks, presents a synthesis that adds important knowledge in this under‐researched topic.

Managerial accounting education generally insists that managers should never consider sunk costs. This suggestion seems inconsistent with a common mode of thinking about future rewards: quasi-hyperbolic discounting. This paper aims to explore the conflict between sunk cost consideration and quasi-hyperbolic discounting and to illustrate when sunk cost consideration may be appropriate.

The author conducted three numerical experiments, i.e. simulated experiments based on analytical models, to demonstrate how it can be beneficial to consider sunk costs in some circumstances. All three numerical experiments assume quasi-hyperbolic discounting. First, the author tested considering sunk costs with future rewards that are certain. Second, the author tested considering sunk costs with uncertain future rewards. Finally, the author tested two different educational interventions to change decision-makers’ thought patterns.

The author found that considering sunk costs worsens decisions when there is bad news and improves them when there is good news. The author found that an educational intervention that partially dissuades managers from considering sunk costs improves decisions when bad news arrives and worsens them when good news arrives. The author also found that an educational intervention that reduces uncertainty improves decisions when bad news arrives and does not worsen these decisions when good news arrives.

The author provided numerical examples of situations in which considering sunk costs is valuable. The findings on educational interventions provide information about the tradeoffs of teaching that sunk costs should never be considered.

The purpose of this study is to investigate and document current US hotel management company practices in budgeting and forecasting, and to recommend a process to improve accuracy and efficiency.

Key corporate financial executives of hotel management companies operating in the USA were surveyed. Different from prior studies that surveyed the US property‐level managers, or European hotel operators, the study surveyed the authors of budget guidelines of US hotel management companies with at least ten units or 1,000 rooms, to discover and document the budgeting and forecasting practices of multi‐unit hotel management companies. Chi‐square and t‐tests for equality of means were used to identify the differences between large and small hotel management companies.

Many concepts were identified that are not found in hospitality management textbooks. Current budgeting and forecasting methods used in the industry present opportunities for improving accuracy. There are also opportunities for time efficiencies, which may lead to improved participant satisfaction. Some significant differences were identified in budgeting and forecasting processes between large and small management companies.

The findings may not apply to independently owned and operated hotels, or small hotel management companies. Future research may focus on identifying economic factors that most influence hotel revenues at the local or regional level. Also, future research may focus on corporate computer software that facilitates intranet consolidation of property level budgets and forecasts and also allows spreadsheet flexibility for exploring various scenarios.

The practical application of the study is the recommendation for a centralized budget process that enhances accuracy, improves efficiency, and reduces “gamesmanship”.

There are four main contributions of the study: the obtaining of inputs from corporate officers of hotel management companies with operations in the USA; the documenting of forecasting and budgeting practices of hotel management companies operating in the USA; the recommending of a forecasting and budgeting process that may improve accuracy and participant satisfaction; and the identifying of differences between large and small companies in relation to forecasting and budgeting practices.

Locally authored textbooks are used at tertiary South African institutions to assist in marketing research studies. The purpose of this paper is to investigate the readability of locally authored marketing research textbooks in South Africa and compare them with international (USA) texts.

South African marketing research textbooks (authored locally) used at South African institutions were identified. Electronic versions of the textbooks were used and analysed using accepted readability formulae. The same procedure was used with texts produced in the USA and the findings of each were compared.

The South Africa texts scored higher on the Flesch Reading Ease score than US texts, which links to the target audience of these books (undergraduate students), while also being cognisant of the reading skills of the target audience but their score still describes them as “difficult”.

The original formulae and theory tend to be dated, though there are recent studies into readability in other areas of business studies. There are also those that question the applicability of readability formulae in the tertiary environment.

Instructors need to ensure that material is at a suitable reading level to maximise the student's learning. For publishers and authors, this means that the examples and illustrations used need to be linked to the context in which the student lives and functions, and not just focus on the English used in the text.

While studies have been conducted into the readability of US textbooks, there is little published research into the readability of regional marketing research textbooks in other contexts to facilitate comparison.

The purpose of this note is to expose accounting students and others to recent findings in management control, specifically to the relationship between the informativeness of a performance measure and its usefulness in performance evaluation.

Numerical examples illuminate key ideas and are easy to follow and replicate by students.

Seemingly in contradiction to the controllability principle, performance measures that are informative about actions taken by employees are not necessarily useful for performance evaluation. This occurs when the performance being measured is related to an intermediate task, such as prepping items prior to final assembly. If prepping is an important factor in the quality of not only the intermediate good but also the finished good, and the quality of the finished good can be reasonably measured, it may not be useful to measure the prepping performance. This result holds even if obtaining the intermediate measure is costless and the intermediate measure provides unique information on the effort given to the intermediate task.

Opportunities to measure employees’ intermediate outputs are ubiquitous; therefore, judicious decisions should be made regarding the use of limited monitoring resources. This note contains intuitive, easy-to-follow illustrations (based on recent findings) that will help students and others identify situations where such evaluations are more and less useful.

Public and private sector managers make investment decisions under uncertainty. Economic efficiency requires that managers who wish to maximize expected utility use NPV. A field test reports that a lower proportion of public managers (20%) utilize NPV than private managers (46%). This difference is significant at p = .01 in both logistic regression and chi-square tests for three competing, but not mutually exclusive, reasons. First, taxpayers are a primary source of capital. Taxation decisions are primarily political events and inefficiency is less likely to be disciplined by capital withdrawal. Second, it is more difficult to estimate expected benefits and costs. Third, investment decisions are often the result of political, not economic, processes. The objective may not be maximization of NPV.

The challenge for accountants in reporting the results of operations is to be aware of the notions of input, output and outcome. Illustrates this with two examples, one from industry and one from the service economy, and explains the notions of input, output and outcome in conjunction with these examples.

This paper aims to examine and critique the accounting literature's dominant readability formula, the Flesch formula. Furthermore, the paper sets out to propose refinement and augmentation to the formula with a view to expanding its applicability and relevance to researchers' attempts at better understanding and critiquing the effectiveness of accounting communications. This aim extends to setting a more robust foundation for informing policymakers' and practitioners' interest in implementing more effective communications with their target stakeholders.

The paper offers an historically informed methodological critique of the current articulation and application of the Flesch formula, both generally and in accounting research. This critique forms the basis for developing proposed revisions and supplementary measures to augment Flesch's coverage. These are presented with sample empirics.

Illustrative examples suggest that it is feasible and desirable to apply a revised formula that reduces Flesch's misplaced emphasis on word length by respecifying its sentence length variable, a probable cause of low readability. A reader attribute score further enhances the formula by integrating the considerable impact of readers' attributes on readability and accounting communication effectiveness. Supplementary measures, comprising non‐narrative communications dimensions, are introduced as a foundation for further research.

The paper provides not only critique but also refinement and augmentation of the much used Flesch readability formula for accounting communications research. It offers a first stage approach to encompassing potentially important communication elements such as readers' attributes, tables, graphs and headings, to date critiqued as potentially important but left unattended by accounting researchers. This offers the prospect of extending Flesch's application to contemporary accounting communications issues and questions.

The objective of this research is to identify areas where audit research can assist the Public Company Accounting Oversight Board (PCAOB) in its deliberation of the auditing standard on engagement quality (EQ) review required by the Sarbanes‐Oxley Act of 2002.

The approach used in this paper is a review of the literature.

The paper links academic research on EQ review to issues raised by the PCAOB. It also identifies questions for future research.

The academic research reviewed in this paper provides important information to the PCAOB staff as it considers EQ review.

The purpose of this paper is to examine the impact of internal control opinions on individuals' judgments about investments.

The approach used is a behavioral experiment where risk assessments and judgments about investments are made for four internal control opinion scenarios.

The results indicate that the type of internal control opinion made no difference for either risk assessments or investment decisions.

Participants are provided with data sets that do not contain all of the information they may acquire when they make actual investment decisions. Also, there is a lack of real consequences for making good or poor investment decisions.

The type of internal control opinion has no effect on risk assessments or investing intentions. Thus, other considerations apparently dominate internal control opinions when making judgments about investments.

This is the first paper to examine whether intentions to invest might be affected by internal control opinions.