Knowledge that Transforms

Abstract In the opinions of the groups surveyed, there was no general agreement as to the acceptability of or the current need for professional schools of Accountancy similar to schools of Medicine or Law. There was, however, good support for such a school among Certified Public Accountants, accounting teachers, and business executives. Most certified public accountants believed that professional schools of accountancy would make a contribution to both the public and private field of accountancy. Deans believed clearly that present schools of business are adequate for the formal education of professional accountants and that there is no need for separate schools of accountancy. Corporate executives appeared to favor separate schools of accountancy. However, the majority of opinions of the executives indicated no current need for a separate school of accountancy. University and college presidents favored the present schools of business and indicated that accreditation of the department of accountancy within a school of business would be acceptable. A majority of accounting professors believed that in most areas of the organizational structure for the formal education of professional accountants a professional school of accountancy might be the most effective means. All groups favored an extension of the current four-year program for the formal education of professional accountants.

Reviews the book "Introduction to Accounting: Financial Statements," by Joseph H. Boyland.

Reviews the book "Guide to Balance Sheets & Profit and Loss Accounts," by Frank H. Jones.

Reviews the book "Automatic Data Processing," by Frederick P. Brooks and Kenneth E. Iverson.

Abstract The article emphasizes the need for revision of the introductory collegiate course in accounting. Among the needed reforms is the deletion of most bookkeeping and special procedural matters, and this should, of course, be accompanied by the elimination of these subjects from textbooks and other instructional materials. For all truly basic and fundamental purposes, as perhaps many textbook writers will acknowledge, double-entry accounting requires just two kinds of records, each of which performs a distinct and readily explainable function. These are the general journal and the general ledger. It is essential that the student master the use of these two devices at the very beginning of his studies, but he will need no additional knowledge of accounting mechanics for any theoretical purposes. the ledger technique which is adopted depends upon the underlying method of keeping track of the inventory. While such underlying procedures may often receive too much emphasis in textbooks, it is with the ledger practices that the article is concerned.

Reviews the book "Financial Information and the Securities Market," by R.J. Chambers.

Abstract The purpose of this article is not to discuss the arguments for or against the use of direct costing. It is instead to locus attention on some of the legal implications a company should keep in mind with respect to taxation, securities regulation, and antitrust and other legislation if it is considering the use of direct costing as an all purpose accounting technique. Advocates of direct costing maintain that it simplifies the interpretation of financial results and that it is particularly useful for profit planning, pricing decisions, and cost control. Opponents do not generally deny that the system has advantages, they are more concerned with its application to external reporting. The National Association of Accountants reported that seventeen of the fifty companies participating in a research study report used direct costing in preparing financial statements for stockholders. In none of these cases had auditors given a qualified opinion or taken exception to the practice. Apparently the CPAs performing the examination believe that the use of direct costing results in financial statements which present fairly both the financial positions of their clients as well as the results of operations for the periods under review.

Abstract The article presents a critical-path notation that can be used effectively in teaching tax provisions. Tax accounting professors emphasizing the current provisions approach to the study of income taxation would do well to consider utilization of this technique in explaining to students some of the more complicated provisions. The illustration given in this article is based upon the 1964 provisions applicable to the sick-pay exclusion. This particular provision, incidentally, incorporates both the pre-1964 rules and the revisions thereto. The author has discovered that the utilization of such a diagram greatly facilitates an otherwise labyrinth communications problem in tax accounting lectures.

Reviews the book "The Pension System in the United States."

Abstract In this article a general framework for converting subjective estimates into more significant data has been presented. The process of combining individual estimates into a more meaningful total has also been treated. Admittedly, results obtained through the use of this procedure are not highly sophisticated. Nevertheless, data obtained and presented in this manner are much more meaningful than those expressed as single-point estimates. In utilizing this approach, management is adding a new dimension to the data utilized in decision-making. It should be expected, then, that better decisions will be the result. In recent years considerable attention has been given to the problem of subjectivity as it relates to the estimated data for decision-making. Obviously, it is not possible to eliminate the subjective factor from estimated data. Yet, it is feasible and highly desirable to provide the decision maker with information relative to the statistical significance of these data. In effect, what is being suggested is that the traditional estimates of expected values be supplemented by corresponding estimates of variances.