Knowledge that Transforms

Abstract Reviews the book "Modern Economic Thought," by Allen G. Gruchy.

Abstract The author is glad that the presidency of the American Institute of Accountants seems to merit recognition by the American Accounting Association. He is a member of both the organizations. The Institute is the national organization of certified public accountants (CPA), primarily concerned with professional public accounting. The Association, with its academic background, emphasizes instruction and the theoretical phases of accounting. Another purpose is that of uniting the profession, advancing the interests of public accountants and encouraging cordial relations between them, and maintaining high standards both for the institute and for the CPA degree which is the hallmark of fitness to practice. It is the stated purpose of the institute to advance the science of accounting, and to develop and improve accountancy education. Accountability and financial planning and control are parts of service to management. Accountants have demonstrated a considerable degree of devotion to service by voluntary and unrewarded public service.

Abstract The article reports on the achievements and progress of the American Accounting Association. One of the impressive accomplishments of the association was the marked increase in membership. The widespread interest of professional practitioners in the work, the aims and objectives, the publications, and the activities of the association in the held of accounting education has been gratifying. Many new teachers at the college level have been added to the membership roles. To all of these new members the association extends a warm and cordial welcome and a standing invitation to participate actively in furthering the purposes which are set forth in our by-laws and statement of purposes. The program of the annual meeting gave a glimpse into still another new undertaking, namely, the development of standards rating in the field of undergraduate and graduate study of accounting. It is hoped that extension of this project may become a continuing activity of the association.

Abstract In October, 1946, President Eric L. Kohler with the then President elect Professor Hermann C. Miller, appointed the Committee on Revision of the Statement of Principles of the American Accounting Association. The appointment of a special committee on revision of the Statement of Principles represented a significant departure from past procedures. As the members of the Association well know, efforts in the past to formulate and summarize accounting principles were those of the Executive Committee of the Association. The Committee undertook first to survey opinion which would aid it, first, in deciding whether a new statement of principles was desirable and, second, if deemed desirable by the Committee, in the formulation of such a statement. It was believed a democratic procedure must offer each member of the Association an opportunity to express himself; that each member must feel he had been given an opportunity to state his position and thoughts. The Committee decided the most economical coverage could be obtained through the medium of the accounting review.

The attached statement of the responsibilities of the internal auditor was prepared by the Research Committee and approved by the Board of Directors at its meeting of July 15, 1947. In taking this action the Board was desirous of lending its full support and that of, the institute to the statement. It was not intended, however, that the treatment of the various matters in the statement was considered in any sense to be final or fixed. Rather it was recognized that the principles and concepts relating to internal auditing are evolving constantly. The approval therefore represented essentially an endorsement of what the Board believes to be a fair and considered statement of the responsibilities of the internal auditor at its present stage of development. The statement is therefore subject to such further modification in the future as may appear to be warranted in the light of new conditions and needs and through further development in the professional stature of the internal auditor.

Several forms of reconciliation schedule are in general usage. One begins with the balance per bank statement. Reconciling items are then added or subtracted until the final figure equals the balance per check stub. Another form begins with the balance per check stub and ends with the balance per bank statement. A third form shows the difference between the balance per bank statement and the balance per check stub. Then reconciling items are offset one against another until the difference is fully accounted for. A fourth form shows all items related to the records of the bookkeeper for the business in one section and all items related to the records of the bookkeeper for the bank in another section. The reconciling items are added and deducted in their proper sections and the final balances are shown to be in agreement. This is the divided form of reconciliation schedule. In preparing some of the reconciliation forms, students occasionally resort to mal and error methods to secure an agreement. They then find it necessary to search their reconciling items to locate those which require journalization to adjust the bank account balance in their records.

Reviews the book "Auditing Procedure," 3ed., by DeWitt C. Eggleston.

Reviews the book "Records for the Control of Growing Manufacturing Enterprises," Paul F. Lawler.

The article presents problems that were prepared by the Board of Examiners of the American Institute of Accountants and were presented as the first half of the November, 1947 Certified Public Accountants (C.P.A.) examination in accounting practice. One of the questions was given the information that Arnold, Bates and Cass, a co-partnership, after many years of successful operation as wholesalers, encountered a period of losses, as a result of which the partners agreed to dissolve the partnership and liquidate the business prepare a statement to show the amount of cash available for distribution to the partners at September 30, 1947, after reserving the full amount estimated to be required to complete the liquidation. Another statement to show how the cash available at September 30, 1947, should be distributed to the partners and a balance-sheet of the partnership, after giving effect to such distribution had to be prepared. any adjustments of prepaid or accrued items, except as indicated had to be disregarded.

Reviews the book "Mathematics of Accounting," 3ed., by Arthur B. Curtis and John H. Cooper.