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Credibility theory. Credibility theory is a branch of actuarial mathematics concerned with determining risk premiums. [1] To achieve this, it uses mathematical models in an effort to forecast the (expected) number of insurance claims based on past observations.
Bühlmann model. In credibility theory, a branch of study in actuarial science, the Bühlmann model is a random effects model (or "variance components model" or hierarchical linear model) used to determine the appropriate premium for a group of insurance contracts. The model is named after Hans Bühlmann who first published a description in 1967.
Adverse selection. In economics, insurance, and risk management, adverse selection is a market situation where asymmetric information results in a party taking advantage of undisclosed information to benefit more from a contract or trade. In an ideal world, buyers should pay a price which reflects their willingness to pay and the value to them ...
Positive accounting can be associated with the contractual view of the firm. [1][2] The firm is viewed as “a nexus of contracts ” and accounting one tool to facilitate the formation and performance of contracts. Under this view, accounting practices evolve to mitigate contracting costs by establishing ex ante agreement among varying parties.
The primary driver of audit demand is the desire to enhance credibility of the information that companies make available to their potential investors. Without an independent party verifying and providing an opinion on a company's financial statements, it is significantly more difficult for firms to attract the investment of the uninformed public.
Accounting ethics. "Accountants and the accountancy profession exist as a means of public service; the distinction which separates a profession from a mere means of livelihood is that the profession is accountable to standards of the public interest, and beyond the compensation paid by clients." Accounting ethics is primarily a field of applied ...
Accounting. Assurance service is an independent professional service, typically provided by Chartered or Certified Public Accountants or Chartered Certified Accountants, with the goal of improving information or the context of information so that decision makers can make more informed, and presumably better, decisions.
Jürgen Habermas in his theory of communicative action developed four validity claims (truth, sincerity, appropriateness and understandability) leading to the concept of credibility. In a different study [ 40 ] researchers empirically validated the claims and derived a two-phase model of "reporting credibility", where first of all ...