Editor's Letter
By Kathy Williams

Cause-Effect Analysis for Target Costing
By Richard C. Chen, Ph.D., CPA, and Chen H. Chung, Ph.D.
Cause-effect analysis (CEA) was developed initially to investigate the causes of quality problems in manufacturing, but the technique now is used for analyzing other kinds of problems, too. It can be used to help companies reduce costs and uncover managerial problems and can help a company integrate its accounting function with operations management to support competitive strategies.

Post-Enron: Stock Compensation Proposal Revisited
By W. Mark Wilder and Morris H. Stocks
The FASB tried to impose tougher standards on stock option compensation but was blocked by public accounting firms, industry groups, fund managers, legislators, and others. Here's another look in the Enron aftermath.

Improving Accounting Education Through Outcomes Assessment
By Otto B. Martinson, Ph.D., CMA, CFM, CPA, and Elizabeth T. Cole, Ph.D., CPA
The accounting profession has undergone major changes over the past decade, but accounting education has not been keeping pace. An outcomes assessment exam, tied in with the Certified Management Accountant (CMA^®) exam, can test students' knowledge and the success of an accounting curriculum.

The Measurement of Shareholder Wealth Creation: A Transatlantic Comparison
By Stephen P. Keef, Ph.D., and Melvin L. Roush, CPA
The most popular measures of shareholder wealth creation are MVA (market value added), promoted by Stern Stewart & Co. in the United States, and TSR (total shareholder return), advocated by William M. Mercer in the U.K. The authors suggest a different method--AR (abnormal return)--and offer formulas to back it up.

A Breakthrough in Transfer Pricing: The Renegotiate-Any-Time System
By Joseph M. Cheng, Ph.D.
Under the RAT (renegotiate-any-time) system, divisions doing business with each other are encouraged to set a transfer price that benefits the company as a whole and not just the buying or selling division alone.