Accounting OVganizations and Society, Vol. 13, No. 3, pp. 263-280, 1988. 0361-3682/88 $3.00+.

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THE MEASUREMENT OF MEANING IN ACCOUNTING: A CRITICAL ANALYSIS OF

THE PRINCIPAL EVIDENCE*

K E I T H A. H O U G H T O N
Curtin University o f Technology, Perth, Western A u s t r a l i a

Abstract

The process of communication between preparers and users of accounting information involves, in part,
the sharing of meaning between those parties. Using the framework of Osgood et aL (TheMesaurement of
Meaning University of IUinois Press, 1957), Haried [The Semantic Dimensions of Financial Reports,Journal
of Accounting Research (1972) pp. 367-391, and Measurement of Meaning in Financial Reports, Journal
of Accounting Research (1973) pp. 117-145 ] provided a first attempt at the 'measurement of meaning' in
accounting. Haried found that the structure within which meaning in accounting was held was different to
the standard structure proposed by Osgood etal. (1957). Based on the results of measurements of meaning
within this structure, Haried (1973) concluded that such measurements were not particularly relevant to
accounting research. The present paper presents a critical re-analysis of Haried's (1973) own data. The re-
sults are inconsistent with Haried's and show that ( 1 ) the structure within which accounting meaning is
held is, largely, consistent with the seminal work of Osgood et al. ( 1957 ); and, (2) the measured meaning
of accounting concepts within that structure is consistent with expectations.

T h e f i r s t p u b l i s h e d a t t e m p t at t h e " m e a s u r e m e n t could not exactly match the receiver's percep-

of meaning" in accounting was provided by tion of that message. A significant difference in
Haried (1972, 1973). This attempt extended meaning implies a significant difference be-
into accounting a type of research which had tween the intended and received message. A
been extensively pursued in other disciplines second issue dealt with by Haried (1973) was
(Heize, 1969). the extent to which seemingly synonymous con-
Haried's work (1972, 1973) focused on the cepts had similar measured meanings.
extent to which various preparer and user Underlying the work of Haried ( 1972, 1973)
groups shared similar meanings for certain rep- was the argument that meaning was central to
resentative accounting concepts. He argued that any discussion of communication, and that,
the lack of shared meaning was a sign that com- given accounting involved communication,
munication between groups was not completely meaning was central to accounting. Haried's
e f f e c t i v e . F o r e x a m p l e , if a c c o u n t a n t s a n d , say, (1972, 1973) work together with most others
bankers failed to share similar meanings for the dealings with the measurement of meaning
concepts "depreciation" or "goodwill", then w e r e , at l e a s t i n p a r t , b a s e d o n t h e p i o n e e r i n g
communication between the groups which was w o r k o f O s g o o d et al., The M e a s u r e m e n t o f
dependent on those concepts could not occur M e a n i n g (1957). T h o s e a u t h o r s d e v e l o p e d a re-
w i t h o u t e r r o r , i.e. t h e s e n d e r ' s i n t e n d e d m e s s a g e search tool that was capable of quantitatively

*The author gratefully acknowledges the help of Bruce Stening of the University of Western Australia and an anonymous
referee for comments and suggestions on a previous revision of this paper; and Andrew Haried of the Arizona State University
for making his data available to the present writer.

263
264 KEITHA. HOUGHTON
measuring meaning. The tool, known as the
semantic differential, comprises a pair of adjecti-
val pairings, one being an antonym of the other
(for example: strong-weak, good-bad, fast-
slow). Between the adjectival pairings are, nor-
mally, seven spaces. Subjects respond to a
semantic differential by placing a check mark on
one of the spaces between the adjectives.
Instruments based on the semantic differen-
tial often have at least ten such scales, and some-
times as many as 30 or more. Thus, a subject
would normally give many responses about a
single concept. An example of Haried's ( 1 9 7 3 )
semantic differential based instrument can be
found in the appendix.
Osgood et al. ( 1 9 5 7 ) noted that the meaning
measured from this process is connotative
meaning, and is distinct from denotative mean-
ing. Within the accounting literature, Karvel
(1979, p.33) observed that shared denotative
meaning results in "individuals [being] able to
agree upon what the message is". Connotative
meanings "refer to an accumulation of emotional
associations a particular [concept] has acquired"
(Bruno, 1980, p. 136). Again, within the account-
ing field, Karvel (1979, p.33) stated: "Connota-
tive congruity is present only when individuals
interpretations of reactions to an intended mes-
sage are similar". Osgood et al. ( 1 9 5 7 ) them-
selves acknowledged that it was connotative
meaning that influenced human reactions.
Within the framework of Osgood et al. ( 1957,
p.26) the "meaning of a sign has been defined as
that point in the semantic space specified by a
series of differentiating judgements". The
semantic space referred to by Osgood et al.
( 1 9 5 7 ) is normally divided into a number of
dimensions. This multi-dimensional semantic
structure is also referred to in the literature as
"cognitive structure" (McNamara & Moores,
1982, amongst others). Haried's research ( 1972,
1973) measured the cognitive structure within
which meaning in accounting was held, and,
based on measurements within the structure,
determined the extent of any between-group
differences in meaning.
Haried (1972, 1973) concluded that, whilst
the technique developed by Osgood et al.
( 1957 ) for measuring meaning was sensitive and
reliable, it measured connotative meaning, and
Haried argued that this type of meaning (and by
inference, the semantic differential technique)
was not particularly relevant in the study of
accounting. Haried (1972, 1973) stated that
another instrument, which measured denotative
meaning, would be more useful.
The basis of Haried's conclusions about con-
notative meaning and the semantic differential
came from certain of his results. In particular, he
found that "No important differences in overall
meaning between preparer and u s e r . . , could be
inferred for t h e . . . [accounting] terms" (Haried,
1973, p. 135), when he had expected to find
such differences.
There is evidence to suggest that Haried's
(1972, 1973) conclusion about the measure-
ment of meaning and the semantic differential
had a profound effect on accounting research.
Unlike other disciplines where the measure-
ment of meaning within the framework of Os-
good e t aL ( 1 9 5 7 ) was common, research into
this aspect of accounting communication is ex-
tremely limited. Only two articles have since
been published in scholarly journals (Oliver,
1974; Flamholtz & Cook, 1978), and the re-
search leading to one of those, that of Oliver
(1974), is said to have c o m m e n c e d prior to the
publication of Haried's (1972, 1973) conclu-
sions. In addition, there have been two unpub-
lished studies, one a doctoral dissertation in
auditing (Karvel, 1979), the other, a working
paper dealing with cognitive structures in ac-
counting (McNamara & Moores, 1982). Given
that Haried's (1972, 1973) work was both ex-
tensive and without obvious error, it is not sur-
prising that few have chosen to pursue this area
of study in accounting.
Haried (1972, 1973) made a significant con-
tribution to the literature. The purpose of this
article is, however, to show that the results on
which Haried based his conclusions were in-
accurate. Based on a re-analysis of certain of
Haried's data, this paper concludes that:
( 1 ) the semantic differential is capable of sen-
sitive measurement of an aspect of meaning
 THE MEASUREMENT OF MEANING IN ACCOUNTING
relevant to accounting research;
( 2 ) the cognitive structures proposed by
Haried (1972, 1973) are not applicable to
accounting; and,
(3) the structure that truly underlies meaning
in the accounting domain is consistent with that
originally proposed by Osgood et al. (1957).
The balance of this paper is divided into five sec-
tions: Overview of Haried's Research; Haried's
1972 Article; Haried's 1973 Article; Re-analysis
of Haried's Data; and, Summary and Conclusion.
OVERVIEW OF HARIED'S RESEARCH
Both of Haried's articles were, to a very large
extent, drawn from that writer's doctoral disser-
tation (Haried, 1970). His work was in two dis-
tinct stages:
( 1 ) the development of semantic differentials
relevant to accounting, and the identification of
the size and nature of the cognitive structure
used within accounting; and,
( 2 ) the refinement of the work in ( 1 ) and its
application to real world subjects.
Stage one was preliminary and largely
exploratory in nature with most of the subjects
being students and with concepts chosen in a
somewhat casual manner. An important part of
Haried's work lay in stage two where, for the first
time, between-group differences in meaning
were to be measured.
HARIED'S ( 1 9 7 2 ) ARTICLE
The first stage of Haried's research was pub-
lished in his 1972 paper and c o m m e n c e d with
the dil~cult task of developing semantic differ-
entials relevant to the accounting domain of
meaning.
Development o f semantic differentials relevant
to accounting
Consistent with the psychology literature
265
(see Triandis, 1959), Haried ( 1 9 7 2 ) developed
his set of semantic differentials using the "triad
procedure". The triad procedure is a set of tasks
related to a series of information sets which
comprise of three concepts (hence the term
tr/ad). In Haried's (1972, pp. 380-381 ) case he
presented subjects with several sets of three
accounting concepts and requested them to:
1. Decide w h i c h of the concepts is different to the ot he r
two.
2. Decide w ha t is ( a r e ) the characteristic(s) of the one
c o n c e p t that makes it different.
3. Complete the following s e nt e nc e bearing in mind one
or m o r e of the characteristics identified in step ( 2 )
above: "The different w o r d is more (less) _ _ than
the other two words."
4. Write d o w n the logical opposite to the w o r d used to
c o m p l e t e the above sentence.
In other words the subjects were asked to: ( 1 )
identify the "odd concept" of the three, ( 2 ) des-
cribe the characteristic that made it "odd", ( 3 )
again describe the characteristic in a single ad-
jective, and ( 4 ) find an antonym for the adjec-
tive.
Again, consistent with the previous psychol-
ogy literature (Triandis, 1959), this procedure
was administered to subjects with a minimum of
twelve sets of three concepts. From this 30
scales were chosen, those cited more than six
times. The subjects for his process were 54 stu-
dents (both in accounting and otherwise), and
11 practising accountants.
To these 30 scales, Haried added three more,
one each for the standard dimensions found in
Osgood et al. (1957). The 33 scales developed
in this way are shown in Fig. 1.
Concept selection
Haried's (1972, p.384) stimulus concepts
were selected on a basis which "was neither as
structured nor as critical as that of the selection
of scales". In all, eighteen concepts were
selected from the terminology of accounting re-
ports. They were said to be "reasonably rep-
resentative of the semantic domain of interest"
(Haried 1972, p.384). They included concepts
such as: asset, goodwill, reserve for doubtful ac-
counts receivable, cash flow and net income,
266 KEITH A. H O U G H T O N

Fig. 1. The semantic differentials developed in Haried (1972). The observations gathered from the adminis-
Beneficial-adverse
tration of this instrument were factor-analysed 1,
Certain-uncertain and the factors extracted were then subjected to
Tangible-intangible
Exact-estimated
varimax rotation.
Variable-constant
Informative-misleading
Objective-subjective
Factor analytic results
Current-past Consistent with general practice, factors with
Productive-unproductive
Planned--unplatmed
eigen values greater than one were extracted.
Safe-risky This produced the factor structure shown in
General-specific
Committed-uncommitted
Table 1.
Complete-incomplete Haried assigned a scale to a factor where the
Permanent-temporary
loading was highest and where it was markedly
Controllable-uncontrollable
Expected-unexpected higher than any other factor loading. Thus, a
Real--imaginary scale which loads only 0.25 could be assigned if
Required-discretionary
Dynamic-static all the other loadings are, say, 0.05 or less and a
Flexible-inflexible scale which loads 0.48 could go unassigned if the
Long term-short term
Cumulative-noncumulative next lowest loading is, say 0.38. The application
Measurable-unmeasurable of Haried's scale assignment criterion means that
Costly-inexpensive
Direct-indirect whilst "cumulative-noncumulative" is assigned
Necessary-unnecessary to the fifth factor "time" (factor loading of only
Common-uncommon
Immediate-remote 0.36), other scales which are more highly corre-
Available-unavailable lated to one or other factors are left unassigned.
Good-bad (representing the 'evaluative' dimension of
Osgood et al., 1957) For example: "productive-unproductive" with a
Strong-weak (the 'potency' dimension) factor loading of 0.45 on the "evaluative" factor,
Active--passive ( the 'activity' dimension ).
"certain-uncertain" with a loading of 0.42 on the
"control" factor and " c o m m o n - u n c o m m o n "
with a loading of 0.46 on the control factor are
amongst others. There appeared to be no special all unassigned. A technique c o m m o n l y adopted
characteristic of the concepts, nor any obvious for the assignment of scales is the selection of
bias in their selection. those which load most heavily (used by both
The order of the concepts was randomised, as Oliver, 1974; and, Flamholtz & Cook, 1978, for
was the order of the scales for each of the con- example). Had Haried employed their tech-
cepts. However, the order of the concepts was nique with the commonly used 0.5 cut-offpoint,
fixed across all subjects and the order of scales his factor structure would have been as shown in
fixed for all concepts. This resulted in a 594-item Table 2.
test instrument. The use of this criterion of heavy loadings (>I
0.5) results in somewhat fewer scales with no
I n s t r u m e n t administration perceptible loss in interpretability. Haried
This instrument was administered to 92 sub- (1972, p.390)himself recommends the use of a
jects, half "sophisticated", half "unsophisti- subset of the 26 assigned scales.
cated". The sophisticated half comprised 18 One further concern with the nature of this
practising accountants and 28 business ad- part of Haried's analysis is the lack of any testing
ministration students; the unsophisticated half, for stability of the factors. Whilst not reported,
16 investment club members and 30 non-busi- re-analysis of Haried's ( 1 9 7 2 ) reported results
ness administration students. suggest that the eigen values of his seven factors

1 H a r i e d ( 1 9 7 2 ) i n d i c a t e d a " p r i n c i p a l factors m e t h o d " . It is a s s u m e d that this is the m e t h o d of analysis n o w k n o w n as "prin-

cipal c o m p o n e n t s " .
 THE MEASUREMENT OF MEANING IN ACCOUNTING 267

TABLE 1. Haried's (1972) factor matrix after varimax rotation, drawn from Haried (1972) Table 6

Scales Factors
I II III IV V VI VII

1. Objectivity
1. Exact-estimated 0.71 O.10 O. 15 O. 11 0.06 0.05 - 0.05
2. Measurable-unmeasurable 0.69 0.13 0.24 0.05 -0.04 0.05 0.06
3. Tangible-intangible 0.66 0.22 0.03 0.14 -0.O1 0.09 0.20
4. Real-imaginary 0.63 0.14 0.11 0.09 0.13 0.14 0.27
5. Objective-subjective 0.62 0.20 0.14 0.22 0.09 0.06 -0.02
6. Direct-indirect O.53 0.21 0.09 O.15 0.07 0.02 0.26
7. Complete-incomplete 0.52 0.27 0.22 O.15 O.18 O. 11 0.06
8. Informative-misleading 0.45 0.25 0.22 0.25 O. 16 0.14 0.24
9. General-specific 0.44 0.01 0.03 0.00 0.00 0.20 -0.01
2. Evaluative
10. Good-bad 0.17 0.80 O.12 0.14 0.16 0.15 0.15
11. Beneficial-adverse O.15 0.78 0.22 0.23 0.17 O.11 0.08
12. Safe-risky 0.23 0.55 0.17 -O.01 0.15 0.O0 0.12
13. Strong-weak 0.28 0.50 0.22 0.26 0.13 0.01 0.14
14. Available-unavailable 0.25 0.44 0.07 0.26 0.09 0.07 0.09
3. Control
15. Planned-unplanned O. 15 0.23 0.69 0.07 0.20 0.07 0.09
16. Expected-unexpected 0.14 0.19 0.67 O.15 0.25 O. 10 O.35
17. Controllable--uncontrollable 0.25 0.24 0.65 0.08 O.11 O. 16 -0.08
4. Activity
18. Active-passive 0.25 0.24 0.12 0.72 0.10 0.12 O.14
19. Dynamic-static 0.19 0.21 0.14 0.57 --0.08 0.20 0.16
5. Time
20. Long t e r m - s h o r t term 0.02 0.19 O.17 0.00 0.79 0.09 0.00
21. Permanent-temporary 0.02 0.15 0.10 0.00 0.54 -0.25 0.05
22. Cumulative-non-cumulative 0.03 0.17 O.12 0.05 0.36 0.03 0.07
6. Stability
23. Flexible-inflexible 0.08 0.22 0.14 0.05 0.09 0.93 0.06
24. Variable-constant 0.O0 0.02 0.06 0.12 -0.08 0.56 0.03
7. Necessity
25. Necessary-unnecessary 0.22 0.36 0.21 O.15 0.06 O.11 0.64
26. Required--discretionary 0.17 0.25 0.10 0.26 0.18 -0.03 0.53
8. Unassigned
27. Committed-uncommitted 0.29 -0.09 0.27 0.08 0.15 -0.11 0.19
28. Current--past 0.28 0.14 0.16 0.14 -0.22 0.04 0.21
29. Productive-unproductive 0.23 0.45 0.05 0.43 0.10 -0.02 0.16
30. Immediate-remote 0.39 0.15 0.18 0.29 -0.04 0.02 0.24
31. Certain-uncertain 0.38 0.05 0.42 0.08 0.34 -0.10 0.19
32. C o m m o n - u n c o m m o n 0.19 0.25 0.46 0.19 0.10 0.18 0.33
33. Costly--expensive 0.20 -O. 11 O.15 0.07 0.25 O. 16 0.20

w o u l d be approximately: 4.1, 3.1, 2.1, 1.5, 1.4,
1.2, 1.1. Ifa scree test (see Kim & Mueller, 1978)
w e r e applied to Haried's results, the o u t c o m e
w o u l d be that possible only three factors w o u l d
be seen as suitable for rotation (i.e. stable and
suitable for interpretation).
Clearly, Haried ( 1 9 7 2 ) m a d e a significant con-
tribution w i t h the d e v e l o p m e n t o f 33 scales po-
tentially suitable for use in a c c o u n t i n g research.
O n e is, h o w e v e r , left w i t h s o m e c o n c e r n o v e r
the factor analytic stage of that study; in particu-
lar, the d e t e r m i n a t i o n o f the n u m b e r o f factors,
and the s e l e c t i o n o f s e m a n t i c differentials that
are u s e d to d e s c r i b e the nature o f factors.
 268 KEITHA. HOUGHTON

TABLE2. Haried (1972) factors and associated semantic differentials,where a 0.5 factor loading criterion is applied
1. Objectivity 2. Evaluative 3. Control
Exact-estimated Good-bad Planned-unplanned
Measurable-unmeasurable Beneficial-adverse Expected-unexpected
Tangible-intangible Safe-risky Controllable-uncontrollable
Real-imaginary Strong-weak
Objective-subjective
Direct-indirect
Complete-incomplete
4. Activity 5. Time 6. Stability
Active-passive Longterm-short term Flexible-inflexible
Dynamic-static Permanent-temporary Variable--constant
7. Necessity
Necessary-unnecessary
Required-discretionary

HARIED'S (1973) STUDY 1973, p . 1 1 9 ) to b e "balanced across the m a j o r

Haried ( 1 9 7 3 ) was based o n a subset of 15
scales from the p r e v i o u s 33. T h e s e l e c t i o n criter-
i o n is n o t specified or easily d e t e r m i n e d . The 15
s e l e c t e d w e r e n o t the scales w h i c h loaded most
heavily o n the s e v e n factors or d i m e n s i o n s .
Nevertheless, these scales, said to r e p r e s e n t
Haried's p r e v i o u s l y d e t e r m i n e d s e v e n i n d e p e n -
d e n t d i m e n s i o n s , f o r m e d the basis of the test in-
s t r u m e n t . Haried's ( 1 9 7 3 ) h y p o t h e s e s w e r e
that:
( 1) certain accounting terms could elicit different mea-
sures from different groups, specifically preparers and
users of accounting communications, and
(2) certain other pairs of concepts which could be re-
garded as synonyms, would have similar meanings to
each other.
The first of the t w o h y p o t h e s e s was, in m a n y
ways, the m o r e important. For the first time
s o m e empirically based quantification w o u l d b e
g i v e n to the e x t e n t of shared m e a n i n g s in the
a c c o u n t i n g c o m m u n i c a t i o n process.
Haried's (19 73) concept
Whilst the c o n c e p t s e l e c t i o n process in
Haried ( 1 9 7 2 ) had b e e n of less c o n c e r n , the
s e l e c t i o n of c o n c e p t s in this stage of Haried's re-
search was important. The s e l e c t i o n criteria
w e r e n o t clearly specified in Haried ( 1 9 7 0 ,
1973), b u t the c o n c e p t s w e r e said (Haried,
s e c t i o n s generally p r e s e n t e d in financial re-
ports". In all, 16 c o n c e p t s w e r e tested in relation
to the two hypotheses:
Hypothesis ( 1 ) c o n c e p t s : cash flow; deprecia-
tion; e x t r a o r d i n a r y item; generally a c c e p t e d
a c c o u n t i n g principles; goodwill; reserve for self-
insurance.
Hypothesis ( 2 ) c o n c e p t s ( i n pairs of a p p a r e n t
s y n o n y m s ) : a c c u m u l a t e d d e p r e c i a t i o n a n d re-
serve for depreciation; capital in excess of stated
value of stock and capital surplus; e s t i m a t e d ex-
p e n s e items a n d p r o v i s i o n for e x p e n s e item; esti-
m a t e d u n c o l l e c t a b l e receivables, a n d p r o v i s i o n s
for d o u b t f u l a c c o u n t s receivable; r e t a i n e d earn-
ings a n d e a r n e d surplus.
T h e s e 16 c o n c e p t s w e r e r a n d o m l y split b y
Haried into t w o sets, each c o n t a i n i n g eight
items. Each set c o n t a i n e d a m i x t u r e of Hypo-
thesis 1 and 2 concepts. Haried c o n s i d e r e d this
m e t h o d of r e d u c i n g s u b j e c t task load to neces-
sary b e c a u s e "it appears d o u b t f u l that profes-
sional p e r s o n s w o u l d b e willing to v o l u n t a r i l y
c o n t r i b u t e m o r e time t h a n [had b e e n deter-
m i n e d in p r e - t e s t i n g ] . . , to an u n s o l i c i t e d ques-
tionnaire" (Haried, 1973, p.129).
Subjects: preparers and users of accounting
data
T h r e e g r o u p s of "sophisticated" r e s p o n d e n t s
w e r e chosen: a c c o u n t a n t s ( d r a w n from the
m e m b e r s h i p list of the Illinois Society of Cer-
 THE MEASUREMENTOF MEANINGIN ACCOUNTING
tiffed P u b l i c A c c o u n t a n t s ) , financial analysts (Fi-
nancial Analysts' F e d e r a t i o n ) , a n d l a w y e r s
( C o o k C o u n t y A t t o r n e y s ) . Table 9 o f H a r i e d
( 1 9 7 3 , p. 131 ) s h o w s that t h e n u m b e r o f u s a b l e
responses from these three groups were respec-
tively; 130, 61 a n d 69, a total o f 260 "half" res-
p o n s e s o r 130 c o m p l e t e sets o f r e s p o n s e s . This
gives an a v e r a g e r e s p o n s e ratio o f 18.3% o v e r
t h e t h r e e groups.
In a d d i t i o n to t h e s e m a i l e d q u e s t i o n n a i r e res-
p o n s e s it a p p e a r s that H a r i e d c o n d u c t e d t w o
l a b o r a t o r y o r field e x p e r i m e n t s , o n e for m e m -
b e r s o f an i n v e s t m e n t club, a n d o n e for non-busi-
ness s t u d e n t s . B o t h t h e s e g r o u p s w e r e said to
r e p r e s e n t " u n s o p h i s t i c a t e d " subjects.
Haried" s r e s p o n s e s
In all, 190 c o m p l e t e sets o f r e s p o n s e s w e r e ob-
tained, a p p r o x i m a t e l y 130 f r o m t h e sophisti-
c a t e d g r o u p s ( w i t h a b o u t half b e i n g f r o m CPAs,
t h e o t h e r half e q u a l l y d i v i d e d b e t w e e n financial
analysts a n d l a w y e r s ) a n d 6 0 f r o m t h e unsophis-
t i c a t e d g r o u p s ( w i t h slightly m o r e s t u d e n t s t h a n
investment club members).
Results
Based o n t h e p r e v i o u s l y d e t e r m i n e d ( H a r i e d ,
1972) seven dimensional cognitive structure,
H a r i e d ( 1 9 7 3 , p. 1 3 3 - 5 ) f o u n d that "No i m p o r -
tant d i f f e r e n c e s in overall m e a n i n g b e t w e e n p r e -
p a r e r s a n d u s e r s c o u l d b e i n f e r r e d for t h e five [in
fact it was six] t e r m s r e l a t i n g to t h e first
g e n e r a l i z e d h y p o t h e s i s . H o w e v e r , i m p o r t a n t dif-
f e r e n c e s o n specific d i m e n s i o n s o f m e a n i n g
c o u l d b e i n f e r r e d for f o u r o f t h e terms". I n d e e d ,
o f t h e 64 " p o s s i b l e differences" m e a s u r e d b y
H a r i e d ( 1973, p. 1 3 4 ) o n l y t h r e e w e r e , u s i n g his
m e a s u r e m e n t t e c h n i q u e s , i m p o r t a n t o r signifi-
cant.
W i t h r e s p e c t to t h e s e c o n d h y p o t h e s i s , cer-
tain b e t w e e n - c o n c e p t d i f f e r e n c e s w e r e found.
In p a r t i c u l a r , an o v e r a l l d i f f e r e n c e w a s f o u n d for
t h e p a i r "capital in e x c e s s o f s t a t e d value" and
"capital surplus".
Thus, w h i l s t b e t w e e n - c o n c e p t d i f f e r e n c e s
2A preliminary re-analysis of the 1972 data bank was also undertaken. Basic results such as number of factors and their eigen
values could not be replicated. The reason for this is unknown and not likely to be determinable.
269
were, apparently, measurable with the semantic
differential t e c h n i q u e , t h e r e w e r e f e w m e a s u r -
a b l e b e t w e e n - g r o u p differences.
RE-ANALYSIS O F HARIED'S DATA
It w a s H a r i e d ' s ( 1 9 7 3 ) w o r k that d e a l t w i t h
b e t w e e n - g r o u p d i f f e r e n c e s in m e a n i n g w h i c h
was s u b j e c t e d to d e t a i l e d re-analysis. 2
Re-analysis o f H a r i e d ' s ( 1 9 7 3 ) d a t a suggests
that his c o n c l u s i o n s a b o u t c o n n o t a t i v e m e a n i n g
are n o t w e l l f o u n d e d . H a r i e d ( 1 9 7 3 ) b a s e d his
m e a s u r e m e n t o f m e a n i n g o n his s e v e n d i m e n -
sions. This m e a n s that, for t h e r e to b e an i m p o r -
tant o v e r a l l d i f f e r e n c e in meaning, substantial
d i f f e r e n c e s o n at least s o m e o f t h e s e s e v e n di-
m e n s i o n s w o u l d b e necessary. F a c t o r analysis
( p r i n c i p a l c o m p o n e n t s analysis w i t h v a r i m a x ro-
t a t i o n ) o f H a r i e d ' s ( 1 9 7 3 ) d a t a casts d o u b t o n
the appropriateness of Haried's seven dimen-
sional s t r u c t u r e . In p a r t i c u l a r , t h e re-analysis
shows:
( 1 ) a lack o f c o n s i s t e n t c o g n i t i v e s t r u c t u r e
a c r o s s all five g r o u p s , a n d
( 2 ) t h e p r e s e n c e o f o n l y t h r e e 'stable' factors
for m o s t o f t h o s e groups.
E x a m i n a t i o n o f the c o g n i t i v e s t r u c t u r e
F a c t o r analysis ( u s i n g SPSS, Nie et al., 1 9 7 5 )
of Haried's (1973) data showed there were only
f o u r factors w i t h g i v e n values g r e a t e r t h a n one:
Factor Eigen value
1 3.32
2 2.03
3 1.58
4 1.24
5 0.95
T h e stability and r e l e v a n c e o f this s t r u c t u r e
c a n b e t e s t e d in a n u m b e r o f ways. As n o t e d
above, a s i m p l e b u t e l e g a n t m e t h o d is t h e s c r e e
test ( K i m & Mueller, 1978). Such a test l o o k s at
t h e rate o f c h a n g e in t h e d e c l i n e o f t h e e i g e n
270 KEITHA. HOUGHTON

values, t h e cut-off p o i n t is said to o c c u r w h e r e t h r e e factor s o l u t i o n s h o w e d c o m p a r a b i l i t y w i t h

t h e rate o f c h a n g e in t h e e i g e n values d e c r e a s e s c o r r e l a t i o n s o f 0.9688, 0.9132 and 0 . 9 3 3 7 for
sharply. In this case, a s c r e e test w o u l d suggest t h e t h r e e factors r e s p e c t i v e l y . This i m p l i es that
that n o m o r e than t h r e e factors are n o t " s c r e e " the relevant cognitive structure within account-
( r u b b l e o r residual). A m o r e r i g o r o u s m e t h o d ing has t h r e e ( n o t s e v e n ) dimensions.
u s e d to test factor stability is factor c o m p a r a b i l - T h e n a t u r e o f that stable s t r u c t u r e can b e
ity. Factor c o m p a r a b i l i t y w a s originally d e s i g n e d f o u n d f r o m t h e final factor matrix. This matrix,
to test b e t w e e n - g r o u p c o m p a r a b i l i t y (Nunnally, after v a r i m a x rotation, is s h o w n in Table 3.
1978; E v e r e t t & Entrekin, 1980), h o w e v e r , it can
also b e u s e d to test w i t h i n - g r o u p stability. A
w i t h i n - g r o u p test c o u l d b e b a s e d o n c o m p a r i n g TABLE3. Factor matrix (varimax rotation) for all groups in
Harmed(1973)
t w o r a n d o m l y s e l e c t e d s u b - g r o u p s o f t h e origi-
nal g r o u p o f subjects. N u n n a l l y ( 1 9 7 8 , p . 4 3 3 ) Scale Factor 1 2 3
d e s c r i b e d t h e m e a n s by w h i c h o n e c a n c o m p a r e Necessary-unnecesssary 0.195 0.611 0.136
t h e t w o ( o r m o r e ) factor s t r u c t u r e s o f t w o ( o r Long term-short term 0.485 0.020 0.401
m o r e ) groups: Exact--estimated 0.013 0.528 0.229
Variable-constant 0.179 0.151 0.229
To obtain factor scores in one analysis, a set of weights Beneficial-adverse 0.674 0.306 0.159
must be applied to the variables. The set of weights re- Planned-unplanned 0.704 0.003 0.069
quired in one analysis can be applied to the scores of the Dynamic-static 0.114 0.235 0.620
different people in the different analysis. In each analysis, Required-discretionary 0.005 0.655 0.095
Permanent-temporary 0.461 0.174 0.522
this would then provide two sets of factor scores - - the
weight for one obtained from the analysis of a different Measurable-unmeasurable 0.087 0.582 0.032
Flexible-inflexible 0.310 0.271 0.599
group of subjects. The correlation between these two
Good-bad 0.684 0.354 0.146
sets of factor scores could be used to judge the compara-
Controllable-uncontrollable 0.582 0.020 0.057
bility of factors in the analysis of the same variable as dif-
Active-passive 0.280 0.355 0.495
ferent groups of subjects.
Real-imaginary 0.126 0.673 0.159
It is this m e t h o d o f factor comparability, previ-
o u s l y u s e d in p s y c h o l o g y ( E v e r e t t & Entrekin,
1 9 8 0 ) w h i c h has b e e n e m p l o y e d here. A r a n d o m T h o s e scales w h i c h load h eav i l y ( g r e a t e r than
split-halves test o f c o m p a r a b i l i t y ( c o m p a r i n g t he
0.5 r o u n d e d to t w o d e c i m a l p l a c e s ) o n t h e t h r e e
factor s t r u c t u r e o f o n e half o f t h e total popula- stable factors are s h o w n in Fig. 2.
t i o n w i t h t h e o t h e r ) s h o w s a lack o f c o m p a r a b i l-
T h e r e is always s o m e d e g r e e o f s u b j e c t i v i t y in
ity ( P e a r s o n c o r r e l a t i o n coefficients for th e four
t h e labelling o f factors. At least in s o m e respects,
factors b e i n g 0.7305, 0.9013, 0.5744 and t h e t h r e e factors h a v e c h a r a c t e r i s t i c s c o n s i s t e n t
0.8168), particularly for t h e first and t h i r d fac- w i t h t h e t h r e e "standard" factors identified by
tors. A c o m m o n cut-off l e v e l for factor c o m p a r a - O s g o o d et aL (1957). O f t h e three, t h e first fac-
t o r appears least like t h e e q u i v a l e n t factor o f Os-
bility is a c o r r e l a t i o n o f a p p r o a c h i n g 0.9, that is
w h e r e t h e shared v a r i a n c e is a b o u t 80% o r g o o d et al. (1957). W h i l e this factor d o e s con-
more. tain s o m e g en er al 'evaluative' c h a r a c t e r i s t i c s
( g o o d - b a d , b e n e f i c i a l - a d v e r s e ) ; it has c e r t a i n
Comparable factor structure o t h e r s e m a n t i c scales ( c o n t r o l l a b l e - u n c o n t r o l l -
Re-specification o f t h e factor s t r u c t u r e into a able, p l a n n e d - u n p l a n n e d ) that are less clearly
Fig.2.
Factor 1 2 3
scales Beneficial-adverse Real-imaginary Dynamic-static
Planned-unplanned Necessary-unnecessary Permanent-temporary
Good-bad Exact--estimated Flexible-inflexible
Controllable--uncontrollable Required-discretionary Active-passive
Measurable-unmeasurable
 THE MEASUREMENTOF MEANINGIN ACCOUNTING 271

"evaluative". I n part, this is p r o b a b l y a r e f l e c t i o n financial analyst and lawyers, a n d a r e a s o n a b l y

o f t h e d o m a i n o f interest. It m a y b e that in
a c c o u n t i n g " c o n t r o l l a b l e " a n d " p l a n n e d " are
e v a l u a t i o n s c o n s i s t e n t w i t h " g o o d " a n d "benefi-
cial". This linkage b e t w e e n g e n e r a l n o t i o n s o f
evaluation and those of"managability" (controll-
able, p l a n n e d a n d t h e l i k e ) m a y b e u n i q u e l y
a c c o u n t i n g o r i e n t e d , a n d n o t r e l e v a n t to m o r e
g e n e r a l d o m a i n s i n v e s t i g a t e d b y O s g o o d et al.
( 1 9 5 7 ) a n d others. T h e s e c o n d f a c t o r q u i t e
c l e a r l y i n v o l v e s m e a s u r e s o f " p o t e n c y " o r sub-
stantiveness (real-imaginary; exact-estimated;
required-discretionary; measurable-unmeasur-
able), w h i l s t t h e t h i r d f a c t o r c l e a r l y r e l a t e s to
"activity" ( d y n a m i c - s t a t i c , a c t i v e - p a s s i v e , flexi-
b l e - i n f l e x i b l e ) . K e e p i n g in m i n d t h e p o s s i b l y
u n i q u e c h a r a c t e r i s t i c s f o u n d in f a c t o r 1, t h e
t h r e e factors f o u n d to b e r e l e v a n t in a c c o u n t i n g
w e r e l a b e l l e d in a m a n n e r c o n s i s t e n t w i t h Os-
g o o d etal. (1957): evaluative, p o t e n c y , activity.
W h i l s t this s t r u c t u r e m a y b e stable for t h e
w h o l e p o p u l a t i o n , s u c h a test says n o t h i n g a b o u t
t h e r e l e v a n c e o r a p p l i c a b i l i t y o f t h e s t r u c t u r e to
individual groups. Table 4 shows the correla-
tions r e s u l t i n g f r o m a f a c t o r c o m p a r a b i l i t y t e s t
b e t w e e n t h e t o t a l p o p u l a t i o n solution, a n d t h o s e
o f t h e i n d i v i d u a l groups.
W h i l s t h i g h c o m p a r a b i l i t y c a n b e o b s e r v e d for
t h e t h r e e "professional" groups: a c c o u n t a n t s ,
c o m p a t i b l e s t r u c t u r e c a n b e s e e n for t h e non-
b u s i n e s s a d m i n i s t r a t i o n students, t h e p o p u l a t i o n ~
s t r u c t u r e is n o t c o m p a t i b l e to t h e m e m b e r s o f
t h e i n v e s t m e n t club. This l a c k o f c o m p a r a b i l i t y
is a sign that this "general" c o g n i t i v e s t r u c t u r e is
n o t a p p l i c a b l e for that p a r t i c u l a r g r o u p . T h e in-
v e s t m e n t c l u b m e m b e r s h a d s o m e different solu-
tion, r e l e v a n t to that g r o u p .
Within-group cognitive structure
Each o f t h e g r o u p s w a s factor a n a l y s e d indi-
vidually. G i v e n t h e results in T a b l e 4, t h e results
for t h e I n v e s t m e n t C l u b g r o u p w e r e o f p a r t i c u l a r
interest. T h e h e a v i l y l o a d e d scales f r o m t h e fac-
t o r m a t r i x o f that g r o u p ( a f t e r v a r i m a x r o t a t i o n )
are s h o w n in Fig. 3.
This s t r u c t u r e is difficult to label. Each o f t h e
t h r e e factors, s e e m s to h a v e different charac-
teristics. It is o f i n t e r e s t to n o t e that, e v e n t h o u g h
t h e factor m a t r i x is n o t c o m p a r a b l e w i t h t h e
p o p u l a t i o n o f subjects, it is i n t e r n a l l y stable (i.e.
i n t e r n a l l y c o m p a r a b l e ) . A split halves test o f
comparability within the investment club
g r o u p s r e s u l t e d in c o r r e l a t i o n coefficients o f
0.9483, 0 . 9 0 6 7 a n d 0.9703.
I n d i v i d u a l g r o u p f a c t o r analyses w e r e e x e -
c u t e d for e a c h o f t h e o t h e r groups. I n t e r n a l c o m -
p a r a b i l i t y w a s o b s e r v e d in t h r e e o f t h o s e four

Fig.3. Heavilyloadingscalesfrom the factormatrixof the InvestmentClubGroup.

1 2 3
Necessary-unnecessary Beneficial-adverse Exact-estimated
Longterm-short term Dynamic-static Variable--constant
Planned-unplanned Active-passive Measurable-unmeasurable
Required-discretionary Real-imaginary
Permanent-temporary
Good-bad

TABLE4. Haried (1973) factor structure comparability - - individual groups' correlation coefficients
Population factors
1 2 3
Groups
Accountants 0.9784 0.9948 0.9421
Financial analysts 0.9558 0.9905 0.9660
Lawyers 0.9724 0.9862 0.9868
Investment club members O.7123 O.7843 O.5885
Students 0.8792 0.8899 0.8677
272 K E I T H A. H O U G H T O N

groups (see Fig. 4).
The students showed instability even when
two and one factor solutions were specified in
the factor analysis. Thus, whilst being reasonably
comparable to the general three factor solution,
that solution was not internally stable. Perhaps
this is a product of the use of a heterogeneous
group of student subjects
Therefore, because of either incomparability
with the population factor matrix or internal fac-
tor structure instability, the investment club and
student groups were deleted from further
analysis. This left the three "professional" (i.e.
Haried's "sophisticated") groups. Thus, even at
this stage, it is possible to identify basic differ-
ences between the "professional" subjects and
the non-professional ones.
Between-group comparability for the three
"professional" concepts
Re-specification of the factor analytic model
for these three groups produced a varimax
rotated solution very similar (although not abso-
lutely identical) to that of the population
described above. The factor comparability re-
mained high both between the three individual
groups and the population ( o f the three groups)
and between each of the individual groups. That
is to say, the three groups (accountants, financial
analysts, and lawyers) each had an underlying
cognitive structure which was very similar to
each other. The correlation coefficients for each
of the comparisons are reported in Fig. 5.
It is interesting to note that there is a higher
correlation (albeit slight) between the two user
groups (financial analysts and lawyers) than be-
tween each of those groups and the preparer
group (accountants). Given this high level of
comparability, this structure was considered as
relevant, and appropriate for the measurement
of the meaning of the various accounting con-
cepts selected for the inquiry.
Relative position o f concepts on three shared
dimensions
The mean score of the subjects in their three
respective groups was determined for each of
the 16 concepts on each of the three factors.
These mean scores of the factors are referred to
below as their 'placements' on the factors or
dimensions. This is because they represent the
direction and extent of the groups' positioning
of concepts on the factors. These are reported
for the accountants (Table 5), financial analysts
(Table 6) and lawyers (Table 7) separately.
As can be seen from Table 5, many of the

Fig. 4. Internal group factor analyses.

Pearson correlation coefficients

Accountants O.9786 0.9462 0.9917
Financial analysts 0.8696 0.9632 0.8652
Lawyers 0.9332 0.9411 0.8634
Students 0.7935 0.6482 0.6552

Fig. 5. Correlation coefficients for between-group comparability.

Population factors
1 2 3
Accountants 0.9936 0.9798 0.9789
Financial analysts 0.9980 0.9496 0.9471
Lawyers 0.9604 0.9948 0.9623
Accountants factors
1 2 3
Financial analysts 0.9909 0.8788 0.8634
Lawyers 0.8981 0.9829 0.8928
Financial analysts factors
1 2 3
Lawyers 0.9843 0.9932 0.9807
 T H E MEASUREMENT OF MEANING IN A C C O U N T I N G 273

TABLE 5. P l a c e m e n t o f c o n c e p t s o n t h r e e s h a r e d d i m e n s i o n s b y a c c o u n t a n t s

Factor
1 2 3
Mean S.E. Mean S.E. Mean S.E.

1. R e s e r v e for d e p r e c i a t i o n * . . . . .
2. R e t a i n e d e a r n i n g s 71 9 25 10 -- 2 7 10
3. P r o v i s i o n for e x p e n s e s i t e m 17 10 -- 49 8 64 9
4. Cash f l o w 27 11 16 9 68 9
5. E x t r a o r d i n a r y i t e m 73 9 - 155 11 14 9
6. E a r n e d surplus* -- . . . . .
7. A c c u m u l a t e d d e p r e c i a t i o n 1 8 6 11 -44 9
8. E s t i m a t e d e x p e n s e i t e m 15 9 - 30 9 80 9
9. R e s e r v e for d o u b t f u l
accounts receivable* . . . . . .
10. D e p r e c i a t i o n 25 9 27 10 -- 36 10
11. Capital surplus* . . . . . .
12. G o o d w i l l - 102 15 -56 9 -59 15
13. G e n e r a l l y a c c e p t e d
accounting principles 52 8 79 8 - 17 10
14. R e s e r v e for self-insurance -- 110 15 44 10 -- 6 11
15. E s t i m a t e d u n c o l l e c t a b l e
receivables 8 9 - 66 13 64 9
16. Capital in e x c e s s o f
stated value of stock 39 11 -4 11 - 167 13

* T h e s e c o n c e p t s w e r e n o t i n c l u d e d in t h e i n s t r u m e n t s d i r e c t e d at t h e m e m b e r s o f t h e a c c o u n t a n t s ' g r o u p .

a c c o u n t a n t s ' m e a n i n g s are i n t u i t i v e l y appealing. o n t h e evaluative d i m e n s i o n . " G e n e r a l l y Ac-

F o r e x a m p l e " R e t a i n e d Earnings" w a s s e e n as
positive on the evaluative and potency dimen-
sions ( " g o o d " a n d " s u b s t a n t i v e " ) b u t n e g a t i v e o n
t h e a c t i v i t y d i m e n s i o n . "Cash Flow" was s e e n as
g o o d , s u b s t a n t i v e a n d active. T h e differential
p l a c e m e n t o f t h e s e t w o c o n c e p t s in c o n s i s t e n t
w i t h e x p e c t a t i o n s , r e t a i n e d e a r n i n g s is a s t o c k
( i n a c t i v e ) , w h i l s t cash f l o w is a f l o w ( a c t i v e ) .
In general, t h e r e w e r e m a n y c o n c e p t s that
w e r e s e e n similarly b y b o t h a c c o u n t a n t s a n d
financial analysts. For e x a m p l e , financial analysts
( T a b l e 6 ) also saw "Cash Flow" as g o o d , substan-
tive a n d active. H o w e v e r , t h e y also s a w s o m e
c o n c e p t s differently t o t h e a c c o u n t a n t s . F o r ex-
ample, t h e y s a w " E s t i m a t e d E x p e n s e s " as nega-
tive o n t h e e v a l u a t i v e d i m e n s i o n , a c c o u n t a n t s
saw it as positive.
Lawyers ( T a b l e 7 ) d i d n o t s e e all t h e c o n c e p t s
in a m a n n e r highly c o n s i s t e n t w i t h e i t h e r o f t h e
o t h e r t w o groups. F o r e x a m p l e , "Cash Flow" w a s
c l o s e to n e u t r a l ( n e i t h e r p o s i t i v e n o r n e g a t i v e )
c e p t e d A c c o u n t i n g Principles" w a s n o t as g o o d
as a c c o u n t a n t s a n d financial analysts saw it, and
l a w y e r s saw " A c c u m u l a t e d D e p r e c i a t i o n " as
n e g a t i v e o n t h e evaluative d i m e n s i o n . B e t w e e n -
g r o u p d i f f e r e n c e s c a n b e o b s e r v e d f r o m Table
10.
Significance o f between-group differences - -
Haried's hypothesis 1
An overall test o f d i f f e r e n c e s o f t h e m e a n i n g s
for t h e six c o n c e p t s r e l a t i n g to H a r i e d ' s first
hypothesis can be achieved with a multivariate
analysis o f variance. In this study, t h e Statistical
Package for Social Sciences ( H u l l & Nie, 1981 )
MANOVA r o u t i n e was u s e d so as to p r o v i d e a
c o m p r e h e n s i v e m e a s u r e o v e r all t h r e e factors.
T h e results f r o m this s h o w e d that, as m i g h t b e
expected, between-concept differences were
highly significant ( F = 78.10, significance <
0.001 ). In addition, b e t w e e n - g r o u p d i f f e r e n c e s
w e r e also highly significant ( F = 3.72, signifi-
 274 KEITH A. H O U G H T O N

TABLE 6. P l a c e m e n t o f c o n c e p t s o n t h r e e s h a r e d d i m e n s i o n s b y f i n a n c i a l a n a l y s t s

Concept Factor
1 2 3
Mean S.E. Mean S.E. Mean S.E.

1. R e s e r v e f o r d e p r e c i a t i o n - 7 17 58 14 - 17 14
2. R e t a i n e d e a r n i n g s 46 11 53 13 28 11
3. P r o v i s i o n f o r e x p e n s e s i t e m 11 15 - 20 16 47 14
4. C a s h f l o w 47 12 41 14 41 13
5. E x t r a o r d i n a r y i t e m 29 15 - 119 15 45 18
6. E a r n e d s u r p l u s 41 14 46 13 - 8 14
7. A c c u m u l a t e d d e p r e c i a t i o n 4 11 58 16 - 27 13
8. E s t i m a t e d e x p e n s e i t e m - 17 14 - 47 13 70 12
9. R e s e r v e f o r d o u b t f u l
accounts receivable 0 13 11 12 47 12
10. D e p r e c i a t i o n 29 12 88 11 - 5 17
11. C a p i t a l s u r p l u s 9 17 12 15 -- 7 7 19
12. G o o d w i l l -153 22 -47 12 -65 19
13. G e n e r a l l y a c c e p t e d
accounting principles 29 18 71 9 - 36 15
14. R e s e r v e f o r s e l f - i n s u r a n c e - 120 18 61 15 -9 11
15. E s t i m a t e d u n c o l l e c t a b l e
receivables 26 13 - 57 24 82 15
16. Capital in e x c e s s o f
stated value of stock 7 21 - 4 16 - 94 21

TABLE 7. P l a c e m e n t o f c o n c e p t s o n t h r e e s h a r e d d i m e n s i o n s b y l a w y e r s

Concept Factor
1 2 3
Mean S.E. Mean S.E. Mean S.E.

1. R e s e r v e f o r d e p r e c i a t i o n - 42 14 58 15 - 18 16
2. R e t a i n e d e a r n i n g s 8 13 46 14 12 12
3. P r o v i s i o n f o r e x p e n s e s i t e m 0 11 - 1 13 55 13
4. C a s h f l o w 4 15 10 14 75 10
5. E x t r a o r d i n a r y i t e m 47 15 -- 1 4 7 16 38 14
6. E a r n e d s u r p l u s 47 14 2 14 38 14
7. A c c u m u l a t e d d e p r e c i a t i o n -- 19 17 34 16 - 47 15
8. E s t i m a t e d e x p e n s e i t e m - 68 16 - 41 12 86 14
9- R e s e r v e f o r d o u b t f u l
accounts receivable - 28 16 - 19 15 26 13
10. D e p r e c i a t i o n 24 13 40 15 - 26 12
11. C a p i t a l s u r p l u s 33 12 29 14 - 45 13
12. G o o d w i l l -92 19 39 17 - 15 16
13. G e n e r a l l y a c c e p t e d
accounting principles 7 18 42 13 - 22 14
14. R e s e r v e f o r s e r f - i n s u r a n c e -- 51 19 74 15 - 9 12
15. E s t i m a t e d u n c o U e c t a b l e
receivables 30 16 - 82 17 44 15
16. C a p i t a l in e x c e s s o f
stated value of stock 15 15 - 31 13 - 51 15
 THE MEASUREMENTOF MEANINGIN ACCOUNTING 275

c a n c e < 0.002). F r o m this o n e c a n c o n c l u d e that TABLE8. Haried's hypothesis 1 - - group and concept effects
t h e s e m a n t i c differentials m e a s u r e m e n t o f con- on individual factors
n o t a t i v e m e a n i n g is s e n s it iv e and c a p a b l e o f t h e Factor Source D.F. F Significance
m e a s u r e m e n t o f o v e r a U b e t w e e n - c o n c e p t differ-
1 Group 2 2.20 O.112
e n c e s in a c c o u n t i n g . Concept 5 78.73 0.001
O n e can also c o n c l u d e that w h e n m e a s u r e - Interaction 10 2.93 0.001
m e n t s are t ak en o n t h e basis o f an a p p l i c a b l e cog- 2 Group 2 6.50 0.002
nitive s t r u c t u r e , a n d w i t h o u t t h e c l o u d i n g Concept 5 129.66 O.001
caused by the inclusion of unstable or non-com- Interaction 10 5.08 0.001
p a t i b l e g r o u p r e s p o n s e s , significant b e t w e e n - 3 Group 2 1.68 0.187
g r o u p d i f f e r e n c e s in m e a n i n g c a n b e m e a s u r e d Concept 5 21.73 0.001
Interaction 10 1.44 0.156
b y t h e s e m a n t i c differential.
T h e s e c o n c l u s i o n s d o not, h o w e v e r , tell us
a n y t h i n g a b o u t t h e n a t u r e and e x t e n t o f t h e s e
b e t w e e n - g r o u p differences. T h e n e e d to TABLE9. Haried's hypothesis 1 - - group effect on individual
e x a m i n e , o n a m o r e d e t a i l e d level, t h e b e t w e e n - factors for each concept
g r o u p and b e t w e e n - c o n c e p t effects also c o m e s Concept Factor D.F. F Significance
f r o m t h e p r e s e n c e o f a significant i n t e r a c t i o n be- Cash flow 1 2 2.10 0.127
t w e e n t h e g r o u p and c o n c e p t effects ( F = 2.86, 2 2 1.42 0.246
significance < 0.001 ). A significant i n t e r a c t i o n 3 2 2.13 0.124
o f this kind c a n m a k e it d i / ~ c u l t o r i m p o s s i b l e to Depreciation 1 2 0.40 0.961
d e t e r m i n e t h e ca u s e o f d i f f e r e n c e s ( s e e Blalock, 2 2 6.03 0.003
1979, a m o n g s t o t h e r s ) . In this case, b o t h th e 3 2 1.50 0.227
c o n c e p t an d g r o u p effect w a s highly significant, Extraordinary 1 2 3.62 0.030
item 2 2 1.77 0.175
h o w e v e r t h e p r e s e n c e o f a significant interac-
3 2 1.91 0.153
t i o n will m e a n that t h e d i f f e r e n c e s are n o t con-
Generally 1 2 3.09 0.049
sistent o v e r all factors, all c o n c e p t s , o r all groups. accepted 2 2 3.66 0.029
That is, a h i g h l y significant b e t w e e n - g r o u p dif- accounting 3 2 0.56 0.573
f e r e n c e m i g h t exist for c e r t a i n o f t h e c o n c e p t s principles
b u t n o t for others, o r a significant b e t w e e n - c o n - Goodwill 1 2 2.58 o.o79
c e p t d i f f e r e n c e m i g h t e x i s t for o n e g r o u p b u t n o t 2 2 17.06 0.001
3 2 2.27 0.107
for others.
Reserve for 1 2 4.03 0.020
E v e n w h e n c o n s i d e r e d o n a f a c t o r b y factor
self-insurance 2 2 1.63 0.200
basis, t h e p r e s e n c e o f a significant i n t e r a c t i o n re- 3 2 0.02 0.978
m ai n s for t w o o f t h e t h r e e factors. This is s h o w n
in T ab l e 8.
In t h e case o f t h e t h i r d factor, "Activity", t h e r e
is n o significant i n t e r a c t i o n . I n d e e d t h e r e exists
n o significant b e t w e e n - g r o u p d i f f e r e n c e o n this T h e lack o f b e t w e e n - g r o u p d i f f e r e n c e s for t h e
factor. Thus, in r e l a t i o n to t h e activity factor, o n e activity d i m e n s i o n is cl ear l y s h o w n in Tab l e 9.
c a n n o t distinguish b e t w e e n groups. Significant d i f f e r e n c e s w e r e f o u n d o n t h e evalua-
O n e w a y o f o v e r c o m i n g t h e p r o b l e m s raised tive and p o t e n c y factors w i t h significant differ-
by t h e significant i n t e r a c t i o n b e t w e e n t h e con- e n c e s b e i n g f o u n d o n b o t h o f t h e s e factors for
c e p t and g r o u p effects is to c o n s i d e r t h e signifi- the concept "Generally Accepted Accounting
c a n c e o f t h e g r o u p effect o n a c o n c e p t - b y - c o n - Principles". H a r i e d ( 1 9 7 3 ) r e p o r t e d n o be-
c e p t basis. Tab l e 9 s h o w s t h e b e t w e e n - g r o u p t w e e n - g r o u p d i f f e r e n c e for this c o n c e p t .
effect o n e a c h o f th e d i m e n s i o n s o f m e a n i n g for O n e can c o n c l u d e that t h e i n s t r u m e n t can in-
e a c h o f t h e six c o n c e p t s . d e e d m e a s u r e i m p o r t a n t d i f f e r e n c e s in meaning,
276 KEITH A. HOUGHTON

b u t t h e e x a c t s o u r c e o f t h e b e t w e e n - g r o u p dif- w i t h analysts s e e i n g t h a t c o n c e p t as l o w e r o n all

f e r e n c e s is still u n k n o w n . It c o u l d b e c a u s e d b y
differences between the two financial expert
g r o u p s , a c c o u n t a n t s a n d analysts; o r b e t w e e n
t h e t w o u s e r g r o u p s , l a w y e r s a n d analysts; o r be-
tween the accountants and the lawyers.
T a b l e 10 s h o w s t h e b e t w e e n - g r o u p differ-
e n c e s f o r e a c h o f t h e c o n c e p t s for t h e f o l l o w i n g
pairings: a c c o u n t a n t s vs f i n a n c i a l analysts;
a c c o u n t a n t s vs l a w y e r s ; financial analysts vs
l a w y e r s . I n t e r e s t i n g l y , t h e r e w e r e m o r e signifi-
cant differences between the two user groups,
f i n a n c i a l analysts a n d l a w y e r s , t h a n e i t h e r o f t h e
o t h e r pairs, b o t h o f w h i c h w e r e b a s e d o n a p r o -
d u c e r / u s e r c o m p a r i s o n . T w o s i g n i f i c a n t differ-
e n c e s e x i s t e d b e t w e e n a c c o u n t a n t s a n d analysts.
Analysts s a w " D e p r e c i a t i o n " as m u c h m o r e p o -
tent, a n d " E x t r a o r d i n a r y I t e m " m u c h less " g o o d "
t h a n d i d a c c o u n t a n t s . F o u r s i g n i f i c a n t differ-
ences existed between accountants and lawyers,
including two relating to "Generally Accepted
A c c o u n t i n g P r i n c i p l e s . " T h e d i f f e r e n c e s be-
t w e e n analysts a n d l a w y e r s w e r e n u m e r o u s .
T h e y d i f f e r e d o n e v e r y f a c t o r for " G o o d w i l l " ,
t h r e e d i m e n s i o n s . T h e analysts s a w " C a s h F l o w "
as h i g h e r , a n d " R e s e r v e f o r S e l f - I n s u r a n c e " as
lower on the evaluative dimension, and saw "De-
p r e c i a t i o n " as m o r e p o t e n t , a n d " C a s h F10w'' as
less a c t i v e t h a n t h e l a w y e r s .
T h e q u a n t i t a t i v e p l a c e m e n t s o f t h e six c o n -
cepts, by each of the three "professional" groups,
a r e s h o w n in T a b l e 11. T h e d i r e c t i o n o f differ-
ences previously reported can be observed.
Significance o f between-concept differences - -
Haried's hypothesis 2
In relation to Haried's second hypothesis
w h i c h d e a l t w i t h p o s s i b l e s y n o n y m s , f e w be-
tween-concept differences emerged for the two
financially trained groups. However, several
s u c h d i f f e r e n c e s w e r e f o u n d for t h e l a w y e r
g r o u p , a n d t h e s e c a n b e s e e n in T a b l e 12. As
n o t e d a b o v e in T a b l e 5, t h e a c c o u n t a n t s w e r e
o n l y t e s t e d b y H a r i e d for o n e o f t h e s y n o n y m
pairs.
O n e c o u l d s p e c u l a t e t h a t m a n y o f t h e differ-
e n c e s arise b e c a u s e l a w y e r s a r e u n l i k e l y to h a v e

TABLE 10. Haried's hypothesis 1 - - group effect on group pairing basis for each concept on all factors
Accountants vs F. analysts Accountants
F. analysts vs lawyers vs lawyers
Concept Factor F Sign F Sign F Sign
Cash flow 1 1.17 0.282 4.85 0.031 1.53 0.220
2 2.07 O.154 2.40 O.126 0.16 0.690
3 2.73 0.102 4.34 0.042 0.23 0.634
Depreciation 1 0.05 0.820 0.07 0.788 0.01 0.930
2 13.37 0.001 6.09 0.016 0.47 0.496
3 2.75 0.101 1.02 0.317 0.44 0.510
Extraordinary 1 7.05 0.009 0.73 0.396 2.56 O.113
item 2 3.71 0.057 0.21 0.211 0.17 0.683
3 3.03 0.085 0.08 0.776 2.37 0.127
Generally 1 1.86 0.176 0.71 0.402 6.51 0.012
accepted 2 0.40 0.528 2.85 0.096 6.48 0.012
a/c principles 3 1.13 O.290 0.46 0.500 0.50 0.772
Goodwill 1 3.68 0.058 4.51 0.037 O.18 0.673
2 0.31 0.582 12.46 0.001 29.43 0.001
3 0.06 0.807 4.31 0.042 3.47 0.065
Reserve 1 O.16 0.694 6.88 0.011 5.91 0.017
for self- 2 1.05 0.307 0.33 O.569 3.14 0.079
insurance 3 0.02 0.884 0.00 0.976 0.03 0.858
 THE MEASUREMENTOF MEANING IN ACCOUNTING 277

TABLE 11. Placement of Haried's Hypothesis 1 - - concepts on all factors by three professional groups (significant differences
are highlighted)

Factor
Concepts 1. Evaluative 2. Potency 3. Activity
No. Name Acct F.A. Law Acct F.A. Law Acct F.A. Law

4 cash~0w 27 i~7 ...... 41 16 41 I0 68 i ~'I'.' """"7"51i

10 Depreciation 25 29 24 127 i881 ..... 40..! - 3 6 -5 -26

5 Extraordinary item i 73 29i 47 - 155 -119 -147 14 45 38

13 Generally accepted accounting principles ~-~ 29 V~ 71 [~ -17 -36 -22

12 Goodwill - 1 0 2 i .-.'.1".53:.'.'-.9.~.i [ - ~ i':4"l'"i~! - 5 9 i.'.-'.6.51.'.'~'511

14 Reserve for self-insurance ~'~ i "7"~210 " ~ . : 44 61 74 -6 -9 -9

Significant differences . . . . . . . . . . . . . . . . between accountants and analysts,

(at 0.05 level) ................... between analysts and lawyers,
between accountants and lawyers.

TABLE 12. Haried's hypothesis 2 - - differences between pairs of concepts by group

Accountants Financial Lawyers

analysts

Concepts Factor F Sign F Sign F Sign

Reserve for depreciation 1 * 0.28 0.600 1.02 O.316
Accum. depreciation 2 * 0.00 0.978 1.17 0.283
3 * 0.27 0.604 1.75 O.190
Capital in excess 1 * 0.01 0.946 0.82 0.369
Capital surplus 2 * O.55 O.461 0.01 0.912
3 * 0.36 0.552 0.79 0.779
Estim. expense items 1 0.02 0.894 1.83 O.181 12.62 0.001
Provision for expense 2 2.27 O.135 1.79 O.186 5.17 0.026
3 1.57 0.213 1.43 0.238 2.45 0.123
Estim. uncollect 1 * 1.98 O.165 0.01 0.914
Reserve for doubtful 2 * 6.69 0.012 7.80 0.007
a/c receivable 3 * 3.34 0.072 0.89 0.350
Retain earnings 1 * 0.09 O.769 4.38 0.040
Earned surplus 2 * O.19 0.668 4.83 0.032
3 * 4.13 0.047 0.64 0.801
*no measurement

as m u c h f i n a n c i a l t r a i n i n g as a n a l y s t s a n d
accountants. One between-concept difference,
that of "Estimated Uncollectible Receivables",
and "Reserve for Doubtful Accounts Receivable"
is p a r t i c u l a r l y w o r t h y o f n o t e . B o t h t h e g r o u p s
that were tested for this concept pair saw the
f i r s t o f t h e s e t w o c o n c e p t s as m u c h l o w e r o n t h e
p o t e n c y d i m e n s i o n t h a n t h e o t h e r c o n c e p t . Al-
t h o u g h n o t c o n c l u s i v e , t h i s p r o v i d e s s o m e evi-
dence that these two concepts may not be com-
pletely synonymous. The placement on the
three dimensions for each of the concepts can be
278 KEITHA. HOUGHTON

s e e n from Table 13. Haried's ( 1972, 1 9 7 3 ) s e v e n d i m e n s i o n a l cog-

Whilst the results of the analysis for Haried's
hypothesis 1 s h o w e d that the s e m a n t i c differen-
tial t e c h n i q u e can m e a s u r e b e t w e e n - c o n c e p t
( a n d b e t w e e n - g r o u p ) differences, the results
h e r e s h o w that such differences are n o t likely to
b e an artifact of the m e a s u r e m e n t i n s t r u m e n t or
the data analysis used. In m a n y cases, and par-
ticularly w h e r e financial e x p e r t subjects w e r e
used, c o n c e p t s w h i c h c o u l d b e r e g a r d e d as
s y n o n y m s s h o w e d n o b e t w e e n - c o n c e p t differ-
ences.
SUMMARY AND CONCLUSION
The c o n t r i b u t i o n m a d e b y Haried ( 1 9 7 2 ) in
d e v e l o p i n g s e m a n t i c differentials r e l e v a n t to the
a c c o u n t i n g d o m a i n of m e a n i n g is a significant
one. It is his s u b s e q u e n t analysis of responses
that c a m e from those scales w h i c h has b e e n the
s u b j e c t of d i s c u s s i o n here.
nitive s t r u c t u r e has b e e n s h o w n n o t to b e applic-
able to Haried's ( 1 9 7 3 ) o w n data. A three-di-
m e n s i o n a l structure, largely c o n s i s t e n t in n a t u r e
w i t h that f o u n d b y O s g o o d et al. (1957), was
f o u n d to b e applicable to Haried's ( 1 9 7 3 ) res-
ponses. More detailed testing of w i t h i n - g r o u p
and b e t w e e n - g r o u p factor c o m p a r a b i l i t y or sta-
bility s h o w e d this t h r e e - d i m e n s i o n a l s t r u c t u r e
to b e applicable to the majority of the groups. It
was f o u n d n o t to apply to either of the "un-
sophisticated" groups ( t h e s t u d e n t s a n d the in-
vestment club members).
Based o n the shared three-factor structure,
Haried's t w o h y p o t h e s e s w e r e tested a n d signifi-
cant b e t w e e n - g r o u p and b e t w e e n - c o n c e p t dif-
ferences w e r e found. The p l a c e m e n t s of the con-
cepts, that is the q u a n t i t a t i v e m e a s u r e m e n t of
meaning, o n the t h r e e d i m e n s i o n s gave results
c o n s i s t e n t w i t h w h a t m i g h t b e expected.
Whilst Haried's ( 1 9 7 2 and 1 9 7 3 ) c o n t r i b u -
tion of s e m a n t i c differentials r e l e v a n t to

TABLE13. Placement of Haried's hypothesis 2 - - concepts of shared dimensions by three groups

Factor
Concepts 1. Evaluative 2. Potency 3. Activity
pair Acct F.A. Law Acct F.A. Law Acct F.A. Law

Accum. depreciation 1 4 -19 6 58 34 -44 -27 -47

Reserve for depreciation * -7 -42 * 58 58 * -17 -18

Capital in excess of stated value of stock 39 7 15 -4 -4 31 -167 -94 -51

Capital surplus * 9 33 * 12 29 * -77 -45

Estimated expense item 15 -17 ~ -30 -47 ~ 80 70 86

Provision for expense item 17 11 ~ -49 -20 ~ 64 47 55

Estimated uncollectable receivables

Reserve for doubtful accounts receivable * 0 -28 * * 47 26

Retained earnings
Earned surplus * 41 * 46 * 17

*no measurement.
[ ] indicate significantbetween-concept difference at the 0.05 level.
 THE MEASUREMENTOF MEANING IN ACCOUNTING 279

a c c o u n t i n g r e s e a r c h w i l l p r o b a b l y e n d u r e , his H a r i e d ' s ( 1 9 7 2 ) o r i g i n a l w o r k . As H a r i e d ( 1972,

particular selection of a sub-set of these scales
a n d his a d o p t i o n o f a s e v e n - d i m e n s i o n a l c o g n i -
t i v e s t r u c t u r e m a y w e l l not. T h i s s t u d y has
s h o w n t h a t m e a s u r e m e n t o f m e a n i n g is p o s s i b l e ,
and that Haried's (1972, pp.133--135) conclu-
s i o n t h a t " N o i m p o r t a n t d i f f e r e n c e s in o v e r a l l
meaning between preparer and users.., could
b e i n f e r r e d . . . " c a n n o t b e s u p p o r t e d b y t h e re-
sults o f t h e analysis b a s e d o n t h e t h r e e "stand-
a r d s " f a c t o r s " e v a l u a t i v e " , " p o t e n c y " a n d "activ-
ity". P e r h a p s n o w t h e c r i t i c i s m w h i c h w a s l e v e l -
l e d at t h e r e l e v a n c e a n d a p p l i c a b i l i t y o f c o n n o t a -
t i v e m e a n i n g and, b y i n f e r e n c e , t h e s e m a n t i c
d i f f e r e n t i a l , to a c c o u n t i n g r e s e a r c h c a n b e p u t t o
o n e side. T h e r e is m u c h r o o m to b u i l d o n
p.380) himself noted, there are "Two major
p r o b l e m s in a d a p t i n g t h e s e m a n t i c d i f f e r e n t i a l t o
[ a c c o u n t i n g ] r e p o r t t e r m i n o l o g y . T h e first is t o
i d e n t i f y p a i r s o f b i p o l a r a d j e c t i v e s r e l e v a n t t o fi-
n a n c i a l r e p o r t t e r m i n o l o g y . T h e s e c o n d is to
identify the independent dimensions of seman-
tic s p a c e . . . " It c a n b e c o n c l u d e d t h a t H a r i e d
( 1 9 7 2 ) s u c c e e d e d in o v e r c o m i n g t h e first o f
t h e s e p r o b l e m s , a n d t h a t it c a n n o w b e s e e n t h a t
t h e d i m e n s i o n s o f s p a c e a r e s i m i l a r to t h o s e
"standard" factors that were originally identified
b y O s g o o d e t al. ( 19 5 7). T h e w a y m a y n o w o p e n
for o t h e r s to p u r s u e r e s e a r c h i n t o t h e m e a s u r e -
m e n t o f m e a n i n g in a c c o u n t i n g .

BIBLIOGRAPHY

Blalock, H. M., Social Statistics (New York: McGraw-Hill 1979).

Bruno, F. J., Behavior and Life: an Introduction to Psychology (New York: John Wiley, 1980).
Everett, J. E. & Entrekin, L. V. Factor Comparability and the Advantages of Multiple Group Factor Analysis,
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280 KEITH A. HOUGHTON

APPENDIX

A sample page of Haried's (1973) semantic differential based instrument.

Generally accepted accounting principles

necessary unnecessary
short-term long-term
exact estimated
constant variable
adverse beneficial
planned unplanned
static dynamic
discretionary required
permanent temporary
unmeasurable measurable
flexible inflexible
good bad
uncontrollable controllable
active passive
real imaginary