Question 1

Describe the efficient market hypothesis and its three forms.

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Question 2

Discuss the concept of critical perspectives research in accounting.

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Question 3

What is the goal of human information processing studies? What are the general findings of these studies and what is the implication for accounting?

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Question 4

What is the basic assumption of agency theory? Why is the relationship between shareholders and management an agency relationship?

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Question 5

Discuss the relationship among research, education, and practice in accounting.

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Question 6

Briefly describe the following research approaches:
a. Deductive
b.	Inductive
c. Scientific method

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a. Deductive
b.	Inductive
c....

Question 7

In their book, "The End of Accounting and the Path Forward for Investors and Managers," Baruch Lev and Feng Gu maintain that flaws in generally accepted accounting principles severely limit the usefulness of financial reporting. What are the three major reasons the authors indicate why accounting reports have lost relevance? What is their solution to this perceived problem?

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Question 8

According to finance theory, a financial market anomaly occurs when the performance of a stock or a group of stocks deviates from the assumptions of the efficient market hypothesis. Katz has classified anomalies into four basic types.
a. What are these four types of anomalies?
b. Give examples of each.

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Question 9

Define the following cognitive biases:
a.	Mental accounting.
b.	Biased expectation.
c.	 Reference dependence.
d.	Representativeness heuristic.

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a.	Mental accounting.
b.	Biased expectation.
c.	...

Question 10

Agency relationships involve costs to the principals. Discuss these costs. Give some examples of each of these costs.

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Question 11

Discuss the difference between normative and positive accounting theory.

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Question 12

What is fundamental analysis and what is its goal?

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Question 13

Kahneman and Tversky studied how people manage risk and uncertainty and developed a theory to describe it they termed prospect theory. Discuss the characteristics of prospect theory.

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Question 14

Discuss the capital asset pricing model including the concepts of unsystematic risk, systematic risk and beta.

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Quiz 4: Research Methodology and Theories on the Uses of Accounting Information