Knowledge that Transforms

Reviews the book "Statistical Sampling for Accounting Information," by Richard M. Cyert and Justin Davidson.

The decade and a half since World War II has witnessed considerable activity by industrial managements and the professions serving them in sharpening and polishing management tools that have been in industry's tool sheds for years. However, refurbishing the old tools has been inadequate. During this era industrial products have been radically changed, principles once held inviolate have given way to new ones and the introduction of new industrial processes, techniques, and research methods have radically altered long standing skill requirements. In this environment, if a profession is to survive it can do so only by orienting itself rapidly to the changing circumstances. The accounting profession during the past 20 years has taken many actions in recognition of a changing business environment. During the decade of the 1940's there was for example, considerable activity in describing and codifying accounting principles, standards, guides for professional conduct and the like. During the 1950's there was substantial emphasis on publicizing an image of the professional accountant as an "independent contractor" expert in attesting to and adding credibility to the financial statements of economic organizations.

Reviews the book "Systems and Procedures for Automated Accounting," by Clarence B. Randall, Sally W. Weiner and Maynard S. Greenfield.

Many accounting textbooks fail to analyze completely the causes of a change in gross profit. Typically, any change is first divided into the change in sales and the change in cost of sales. Each of these is in turn split into the change due to volume and the change due to unit prices or cost. This last breakdown is pictured as clear cut, and as easily determinable. Actually, the split between volume and price, or between volume and cost is not so easily determined. A portion of the change may be due to a combination of these factors, which are impossible to separate. The failure to point this out to students, especially to good students, leaves them confused on the whole problem. They fail to see the logic of the textbook presentation, and understandably so. It is a practical short-cut which ignores the realities of the situation, and departs in a degree from a purely logical basis. It is not intended here that the traditional way is wrong from a practical analysis viewpoint. It is contended, however, that an effort should be made to show the student what the realities of the situation are, and why the practical approach is followed.

Reviews the book "Price Discrimination Under the Robinson-Patman Act," by Frederick M. Rowe.

The corporate device for organizing productive forces, while a monumental success in permitting coordinated economic activity on a vast scale, has caused some serious problems even with the plenitude of goods and services that gives us our so-called "affluent" society as of January 1963. The factors that have spoilt the in-come concept merely mirror the problem of our society, a society which has a long established tradition of "drifting," a great reluctance to face disagreeable facts. Professional people, on the other hand, are trained to seek out the facts, agreeable or otherwise, and to point the way to a solution if they can. Obviously a reconstituted income concept, that is, one that reveals to the fullest extent possible significant clues about management's performance, will not solve all of the problems mentioned above. But it is the only accepted measure of enterprise performance available today. At the present, therefore, accountants should be concerned with making such improvements in their "success indicator" -the income concept-as they can.

Accounting is the art of measuring and communicating financial information. This statement is not shocking or even surprising, yet the acknowledgement that accounting is concerned with measurement is the first necessary step towards a long awaited revolution in accounting. This revolution is not restricted to accounting, it has already taken place in other disciplines where measurement is crucial. For example, the classical concepts of measurement in physics and psychology have already undergone drastic changes. It is time for restrictive definitions of measurement in accounting to topple. In the distant past man used numbers in a simple manner. For example, he counted the number of sheep in the field and possibly added the number of sheep in one pasture to the number of sheep in another pasture to find the total number of sheep. But now numbers are used in a much more complex manner. For example, psychophysicists use numbers to express measures of loudness and physicists measure the mass of the sun or the velocity of an electron. Thus the nominal scale is used to know whether water is frozen or liquid, and an ordinal scale whether it is cold or colder, and the interval scale is used to willing to register under the Act of 1855. The framers of this Act attached increased importance to the position of auditor, in the hope of protecting third parties from being harmed by their inability to go beyond the assets of the company to the personal assets of the proprietors in the event of insolvency.

This article presents views of the author who is the president of American Accounting Association on contributions of the association. According to the author since its beginning 46 years ago, the American Accounting Association has made many significant contributions in accounting research and in accounting education. These accomplishments have resulted from the combined efforts of a multitude of dedicated members who have contributed their time and talents to the Association. While it is appropriate to pay homage to the past, the challenges which lie ahead necessitate immediate attention and action. During the coming year many of the association's members will have an opportunity to serve the Association in a variety of ways. While it is appropriate to pay homage to the past, the challenges which lie ahead necessitate immediate attention and action. The annual convention will be held on the campus of Stanford University, Palo Alto, California on August 26-28, 1963. The convention arrangements committees are doing everything possible to provide its members and their family with the utmost in comfort and enjoyment in Palo Alto.

1962 annual meeting of the American Accounting Association was held at East Lansing, Michigan on August 27-29, 1963 with the College of Business and Public Service of Michigan State University as host. The meeting was one of the largest and most successful in the history of the Association. A number of interesting tours and special luncheons were provided for ladies attending the meeting, and special programs were arranged for teenagers and children, including dances, movies, swimming, and educational campus tours. At the luncheon and business meeting president Raymond C. Dein presided and gave a report on Association activities for the year. A motion to accept the report of the Nominations Committee was made from the floor and carried, instructing the Secretary-Treasurer to cast a unanimous ballot for the foregoing slate of nominees. At the banquet on the same evening, Dein introduced the officers and guests at the speakers table and the newly elected 1963 officers.

Reviews the book "Standard and Direct Costing," by Cecil Gillespie.