A THEORETICAL AND EMPIRICAL INVESTIGATION OF THE EFFECTS OF FASB STATEMENT NO. 33 ON LENDING DECISIONS.
Item
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Title
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A THEORETICAL AND EMPIRICAL INVESTIGATION OF THE EFFECTS OF FASB STATEMENT NO. 33 ON LENDING DECISIONS.
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Identifier
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AAI8312343
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identifier
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8312343
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Creator
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EL-MAKSY, MOSTAFA M.
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Contributor
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Leopold Bernstein
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Date
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1983
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Accounting
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Abstract
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Measuring and reporting the effects of changing prices have been debated in the accounting literature since 1918. In 1979, the FASB issued Statement of Financial Accounting Standard No. 33 (SFAS 33), the first pronouncement imposing supplementary reporting requirements. This study investigated the effects of SFAS 33 on lending decisions.;While the review of theoretical literature showed that the disclosure of inflation effects should benefit investment and lending decisions, review of the empirical literature showed mixed results with the majority of the studies finding no statistically significant effects.;A framework of the decision making model of credit grantors was developed and a theoretical analysis showed that most of SFAS 33 disclosures can be accomodated in that model.;In order to determine whether SFAS 33 data affect lending decisions, a loan decision situation was constructed and a field study was conducted. Questionnaires were mailed to 1,050 commercial bank lending officers in 240 banks in 40 States. Lending officers were classified into 7 groups one of which received no SFAS 33 data and was used as a control group. Six null hypotheses were developed: (1) SFAS 33 data do not lead to decisions different from those based on conventional historical cost data, (2) SFAS 33 data presentation mode does not affect lending decisions, (3) the type of SFAS 33 data does not affect lending decisions, (4) SFAS 33 data do not affect the time spent in data analysis and making decisions, (5) SFAS 33 data do not affect the degree of consensus among decision makers, and (6) SFAS 33 data do not affect the consistency of decisions.;One-way and two-way analysis of variance, student t, and the non-parametric Mann-Whitney U statistics were used to test the above hypotheses. None of the hypotheses could be rejected except No. 4. However, SFAS 33 data seem to have a directional effect. In about 94% of the cases, SFAS 33 data led to more unfavorable decisions than the historical cost data. Futhermore, using canonical correlation analysis showed that, in the absence of SFAS 33 data, lending officers depend on their personal attributes more than on financial accounting information.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
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Program
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Accountancy
