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The “Mathews Committee” (Mathews, 1990) concluded that the research performance of the accounting discipline in Australia was weak. This paper is motivated by the need to improve the quality of accounting research in Australia and probably some other countries as well. It discusses three issues of crucial importance to research quality ‐ internal, external, and construct validity with the discussion illustrated with examples from existing accounting research. Internal validity is concerned with the ability to make causal statements from a piece of research. External validity is concerned with the ability to generalize from the research and construct validity is interested in the validity of the variables measured. Internal and external validity are discussed within the context of five common research designs. No one design is strong in both types of validity and tradeoffs between internal and external validity are necessary. When designing a new research project, the particular tradeoffs made should depend on the research objectives. The paper discusses how these choices might be made and how, if internal validity problems exist, they might be minimized. With construct validity, no tradeoffs are appropriate ‐ the researcher should attempt to eliminate this type of invalidity. The paper discusses how this might be done.

This paper's aim is to study multi‐perspective strategic goal setting and performance reporting systems and investigate: if the strength of the alignment of the goals and performance measures is associated with organisational performance and if performance reporting emphasis (PRE) is associated with performance.

Structured interviews with CEOs of 50 Australian companies with sales greater than $100 million per annum were conducted.

The research identified 11 dimensions of PRE and 13 dimensions of organisational performance. The strength of the alignment of the strategic goals and the performance reporting measures was positively associated with organisational performance. PRE was positively associated with organisational performance. The alignment finding was the stronger of the two.

The research identified several dimensions of performance reporting that organisations might consider using in their performance reporting systems. The findings suggest organisations should closely align their strategic goals with their performance reporting measures. Further, if an organisation wishes to achieve high performance on a particular dimension, it should be given some emphasis in their performance reporting system.

In 1985 Canada became the first country to replace its funds flow statement by a cash flow statement. By mid 1991, South Africa, the USA and New Zealand had done the same. Britain, Australia and the IASC all issued statements announcing their intention to follow suit. Thus we have the first example in accounting history of the replacement of one of the three final accounts by an entirely new report. The new report, the cash flow statement, when compiled under the direct method, is a receipts and payment account rearranged under the three headings of operations, financing and investment. A receipts and payments account is the earliest and simplest form of final account, long predating the profit & loss account and balance sheet, and long predating Pacioli's “De Summa Arithmetica” in 1492. The statement which the Cash Flow Statement replaces is less than 120 years old (Rosen & De Coster 1969) and was only mandatory in published British accounts since SSAP 10 came into force in 1975. The purpose of this article is to hold an inquest into the death of the funds statement to determine the cause of death.

Internal control evaluation is a critical component of the overall audit process, mandated by auditing standards worldwide. These standards divide internal control structures into a number of elements, summarised as the control environment, information systems, and control procedures. Significant research exists as to auditors’ evaluations of internal controls. However, little work appears to consider the elements’ inter‐actions and relative significance. This study attempts to gauge the relative importance external auditors assign to the three elements. 94 practicing auditors evaluated internal control structures in two fictitious companies, one with strong internal control elements throughout, the other with one of the three set at a lower reliability level. The results indicate auditors consider control environment the most important element of internal control. The effect of weakening this element was that auditors assessed all three elements and overall evaluation as less reliable. Varying the other two elements did not have such significant effects. The findings carry ramifications for the auditing profession, particularly in drafting auditing standards on risk assessment.