We review and simultaneously introduce a convenient statistical concept for
the mathematical representation of the Statistical Activity Cost Theory (SACT)
introduced by Willett (1987, 1988).
Further, we discuss, and present a critique of a variety of statistical models
with respect to long
debated accounting problems, such as the allocation of joint costs and
depreciation.
We finally propose that taking the effort to combine those models results in a
novel statistical accounting system and this is discussed by means
of the so-called virtual firm.
Our approach is methodological rather than empirical.
We endeavour to demonstrate that the statistical models presented herein have a
more natural interpretation and applicability than their deterministic
analogues: hence, this review presents promising outcomes and useful perspectives
for the accounting profession.