Is Accounting an Information Science?

31 Pages Posted: 18 Jul 2018 Last revised: 3 Aug 2018

See all articles by John C. Fellingham

John C. Fellingham

Ohio State University (OSU) - Department of Accounting & Management Information Systems

Haijin Lin

University of Houston

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Date Written: June 26, 2018

Abstract

The central result is an equality connecting accounting numbers with information. ln (1 ((income)/(assets)))=r_{f} I(X;Y), r_{f} is the risk free rate, ln is the natural logarithm, Y is the outcome of interest, X is the information signal about Y, and I(X;Y) is a Shannon information measure. The equality is derived using economic income accounting; it is shown to hold, under appropriate conditions, for declining balance and straight line depreciation methods. Some social welfare implications are explored.

Suggested Citation

Fellingham, John C. and Lin, Haijin, Is Accounting an Information Science? (June 26, 2018). Available at SSRN: https://ssrn.com/abstract=3202973 or http://dx.doi.org/10.2139/ssrn.3202973

John C. Fellingham

Ohio State University (OSU) - Department of Accounting & Management Information Systems ( email )

2100 Neil Avenue
Columbus, OH 43210
United States
614-292-2488 (Phone)
614-292-2118 (Fax)

Haijin Lin (Contact Author)

University of Houston ( email )

390F Melcher Hall
Bauer College of Business
Houston, TX 77204-6021
United States
7137437771 (Phone)

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