Information theoretic approach for accounting classification

E.M.S. Ribeiro and G.A. Prataviera

Physica A: Statistical Mechanics and its Applications, 2014, vol. 416, issue C, 651-660

Abstract: In this paper we consider an information theoretic approach for the accounting classification process. We propose a matrix formalism and an algorithm for calculations of information theoretic measures associated to accounting classification. The formalism may be useful for further generalizations and computer-based implementation. Information theoretic measures, mutual information and symmetric uncertainty, were evaluated for daily transactions recorded in the chart of accounts of a small company during two years. Variation in the information measures due the aggregation of data in the process of accounting classification is observed. In particular, the symmetric uncertainty seems to be a useful parameter for comparing companies over time or in different sectors or different accounting choices and standards.

Keywords: Information theory; Accounting; Accounting classification; Mutual information (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:416:y:2014:i:c:p:651-660

DOI: 10.1016/j.physa.2014.09.014

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