Income smoothing in accounting and business literature prior to 1954

              The Accounting Historians Journal Vol. 19, No. 2 December 1992
Dale Buckmaster UNIVERSITY OF DELAWARE
INCOME SMOOTHING IN ACCOUNTING AND BUSINESS LITERATURE PRIOR TO 1954
Abstract: The origin of income smoothing in literature has been at-tributed to different authors in recent years. However, the attribu-tions have been made based on research using a simple analysis of the term "income smoothing". This study considers the modern con-cept of income smoothing rather than simply the term itself. Using this approach, income smoothing is either explicitly or implicitly rec-ognized and discussed in literature long before the aforementioned authors. A lack of awareness has been the primary reason for modern income smoothing research overlooking the earlier literature on the subject. This awareness can be ascribed to weak citation analysis. Therefore, researchers should be more cautious in how they use cita-tion analysis.
INTRODUCTION
Several authors in recent years have made explicit refer-ences to the origin of income smoothing in literature. Cushing [1969], Dascher and Malcom [1970], and Imhoff [1981] made statements that Gordon, Horwitz and Meyers [1966] were the authors of the first empirical study of income smoothing. Imhoff [1981] also identified Hepworth's article [1954] as being the first theoretical discussion of income smoothing. Archibald [1967], Ronen, Sadan and Snow [1977], Eckel [1981], Gamble and O'Doherty [1985], and Dharan [1987] attribute the origin of the recognition of income smoothing to Hepworth [1953], and White [1970] attributes the smoothing hypothesis to Gordon [1964]. None of these attributions are correct if the concept of income smoothing rather than the term, income smoothing, is considered. Modern authors generally take the broad-based, flexible view that income smoothing is management action
Research support was provided, in part, by the KPMG Peat Marwick Fac-ulty Development Fund, University of Delaware. The author wishes to thank Richard Vangermeersch, Scott Jones, R.H.K. Carstens, and two anonymous ref-erees for their valuable comments.