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In financial economics, finance, and accounting, the earnings response coefficient, or ERC, is the estimated relationship between equity returns and the unexpected portion of (i.e., new information in) companies' earnings announcements.
Given the above, one view of the progression of the accounting and finance career path is that financial accounting is a stepping stone to management accounting. [16] Consistent with the notion of value creation, management accountants help drive the success of the business while strict financial accounting is more of a compliance and ...
Accounting research is carried out both by academic researchers and by practicing accountants.Academic accounting research addresses all areas of the accounting profession, and examines issues using the scientific method; it uses evidence from a wide variety of sources, including financial information, experiments, computer simulations, interviews, surveys, historical records, and ethnography.
Accounting, also known as accountancy, is the process of recording and processing information about economic entities, such as businesses and corporations. [1] [2] Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. [3]
Financial accounting is the preparation of financial statements that can be consumed by the public and the relevant stakeholders. Financial information would be useful to users if such qualitative characteristics are present. When producing financial statements, the following must comply: Fundamental Qualitative Characteristics:
If no cause-and-effect relationship exists (e.g., a sale is impossible), costs are recognised as expenses in the accounting period in which they expired, i.e., when the product or service has been used up or consumed (e.g., spoiled, dated, or substandard goods, or services no longer needed).
A financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting , there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization.
Financial economics is the branch of economics characterized ... the relationship between rationality and ... see comments under Financial modeling § Accounting.