Measuring the Costs of Responding to Business Risks
By Brian Ballou, Ph.D.; Dan L. Heitger, Ph.D.; and Thomas D. Schultz, Ph.D.
Enterprise risk management (ERM) is becoming an increasingly important aspect of managing a business in today’s complex global marketplace. By more thoroughly understanding and measuring the costs of risk-reduction strategies, organizations are better able to compare the net benefits associated with reducing risks to a level more in line with their risk appetites.

Trade-offs in Objective and Subjective Performance Evaluation: A Case Study Examining the Validity of Agency Theory Predictions
By Leslie Kren, Ph.D., CPA, and Tom Tyson, Ph.D., CMA
Is it better to use an objective system or a subjective system to evaluate managers’ performance? The authors examine the control system used by Wegmans Food Markets, Inc., and apply Agency Theory to it to see whether the theory’s principles can be applied to the workplace. Several top-level executives offered their opinions on the usefulness and functionality of this subjective control system.

The Proposed Financial Reporting Overhaul and Business Valuation
By James A. Largay III, Ph.D., CPA, and Samuel C. Weaver, Ph.D.
Proper disclosure of financial information can be critical to a company’s health. In this article, the authors examine two proposed new approaches to financial statement presentation and discuss their merits. They also offer some examples from Cadbury Schweppes.

How Do German Companies Run Their Cost Accounting Systems?
By Gunther Friedl, Ph.D.; Carola Hammer; Burkhard Pedell, Ph.D.; and Hans-Ulrich Küpper, Ph.D.
There have been many discussions about the differences in cost accounting in Germany and the United States. Here the authors present the results of their survey of the 250 largest German companies in terms of annual revenue. Those companies’ cost accounting systems provide a high level of detail for managers, focus on cost centers and cost center accounting, and separate costs into fixed and variable components for easy analysis of profits.