Knowledge that Transforms

Abstract Reviews the book "Analysed Reporting-Background Study."

Abstract In May of 1975, 1976, 1977, and 1978 a faculty-recruiting questionnaire was mailed to accounting program administrators of schools holding membership in the American Assembly of Collegiate Schools of Business. The purpose of the study was to determine the supply of, and demand for, accounting faculty along with other pertinent information concerning the recruitment of new faculty. A discussion of the 1978 findings along with an analysis of the four-year trend are presented. Ample evidence of a faculty shortage is provided. There is an insufficient number of professional teachers to meet classroom staffing needs. This, in turn, may be a threat to the quality of accounting education. Exhibits are in comparative form for the four years and show details of the salaries offered new assistant professors, the availability of summer teaching and summer research, and the types of courses and number of course hours taught by the new assistant professors. The four-year trend displayed in the exhibits is briefly discussed.

Abstract ABSTRACT: This paper views the external acquisition of services as a variation of the traditional make-buy problem. A linear programming framework for external acquisition is proposed which generalizes the traditional make-buy model by incorporating the simultaneous equation relationships for reciprocal services. Using linear programming results it is possible to determine whether external acquisitions are economically attractive and in what quantity. In addition, this paper demonstrates how to use the linear programming results to compute cost allocations, even when some overhead services are purchased externally.

Abstract The participation observation method, though not extensively utilized in the field of accounting, is recognized as a credible technique for the development of understandings concerning complex social settings and relationships. The philosophical grounding for the approach is the assumption that a viable avenue for examining such an organizational setting is through immersion of the researcher into the milieu of the social interaction. The technique also requires a longitudinal view of the organization in as complete an array of situations as possible. Given the complexity of public accounting firms, it is questionable as to whether observations over a brief period are sufficient. This concern is compounded by the decision not to observe during the busiest part of the firm year. There has been precious little research on the nature and performance of public accounting firms, but the researcher who gains access to an organization and then fails to discuss findings in relation to existing research does a disservice.

Abstract Reviews the book "Operational Auditing," by D.L. Scantlebury and Ronell B. Raaum.

Abstract Reviews the book "Advanced Accounting: An Organizational Approach," 4th ed. by Norton M. Bedford, Kenneth W. Perry and Arthur R. Wyatt.

Abstract ABSTRACT: Claims about the benefits to be derived from dichotomizing income into current operating profit (COP) and holding gain (HG) are examined in this article. Separability of an asset from the risk of change in its price is shown to be a necessary and sufficient condition for separate evaluation of the operating and holding decisions with respect to the asset. When risk is separable, the appropriate breakdown of income into operating and holding components is defined. When the risk is not separable, no meaningful breakdown is possible. Other claims for a COP-HG dichotomy, e.g., the usefulness of COP in making various business decisions and interfirm and interperiod comparisons, are shown to be unjustified. In the absence of benefits, the direct cost of compiling data positively unattractive. The arbitrary nature of this dichotomy is illustrated through the construction of an equally defensible alternative.

Abstract ABSTRACT: This article examines the ratio-scale view in accounting from the standpoint of modern measurement theory. It also provides interpretations of the tenets of modern measurement theory in accounting.

Abstract Canning's book "The Economics of Accountancy-After 50 Years," is the result of a "comprehensive study of accounting theory and practice," even though from the viewpoint of "the professional student of economics." Accounting is necessarily aggregative. Canning found that its literature and practice abounded with examples of different competing formulas or techniques of valuing. Little attention had been given to the effects of this on the meaning of financial statements and almost nothing had been done "to discover to what extent a common, general method might be expected to enhance the usefulness of the principal statements." This condition needed rectifying. The time-schedule of the money valuations of "successive desirable events proceeding from a wealth source" constitutes a measure of gross realized income. Direct valuation is possible only when "a realized money income exists and is statistically determinable." Realized money income is here used of calculated present value, which entails setting off the series of expected money outflows against the series of expected money inflows and discounting the net inflows to a present date.

Abstract Reviews the book "The Impact of Statement of Financial Accounting Standards No. 8 on the Foreign Exchange Risk Management Practices of American Multinationals: An Economic Impact Study," by Thomas G. Evans, William R. Folks and Michael Jilling.