Knowledge that Transforms

In the fifty years since the first law was enacted to license certified public accountants, there have been increasing efforts toward standardization within the profession. For the most part, the progress toward uniformity has been on a national scale through the efforts of national organizations. From a theoretical standpoint, at least, it would appear that the education and training of accountants for the profession should also approach uniformity on a national scale. The important question for CPA examiners is: "What type and how much training must a candidate have before he can be allowed to practice?" This question, of course, includes formal education or training in accounting schools or colleges, as well as what is termed "practical experience" in accounting work, and particularly in public accounting. Theoretically, the answer to this question should be the same in one U.S. state as in another. And it is reasonable to believe that approximate uniformity in answering the question will affect the degree to which high standards of public accounting practice are adopted and maintained throughout the U.S.. If, in some states, little or no training is required before candidates enter the profession it is possible, but by no means certain, that some will obtain additional education and practical training before practicing on their own account. But others, having the stamp of approval from a CPA board, will plunge into engagements for which they are not qualified and will make mistakes which a longer training period would have prevented.

Reviews the book "Foremen's Unions: A New Development in Industrial Relations," by Carl J. Cabe.

Comprehensive auditing of government corporations had its inception in Section 5 of Public Law of the Seventy-ninth Congress. This law was originated as the George Bill. It was passed February 24, 1945. On December 6, 1945, a second law was enacted concerning corporations which contained somewhat similar provisions as to auditing but also provided for budgetary and other controls. This was the Government Corporation Control Act. The first fiscal year for which audits were to be made was that ended June 30, 1945. Reports are addressed to the Comptroller General and transmitted by him to the Congress, one copy to each house. That to the House of Representatives is sent to the Speaker of the House. That to the Senate is sent to the President of the Senate. Copies go to the President of the United States, the corporations, the Treasury Department, and the Bureau of the Budget. Each report is printed, and a limited number of copies may be obtained from the House Document Room. Whenever there is public demand for as many as 500 additional copies of any report, the Government Printing Office will print an additional supply for sale at from ten cents per copy up, according to the size of the report.

The article presents questions and answers to the problems, which were prepared by the Board of Examiners of the American Institute of Accountants and were presented as the first half of the C.P.A. examination in accounting practice in November, 1946. The candidates were required to solve both problems. The weights assigned were: problem 1: 30 points; problem 2: 20 points. The time allowed was four and a half hours. A suggested time schedule is given as: Problem 1: 90 minutes; Problem 2: 120 minutes. It has been asked by the president of Novo Kitchen Aids, Inc., manufacturer of home appliances, to review the company's capital, surplus and reserve accounts and to make such proposals for their revision and balance-sheet presentation as good accounting may suggest. (a) Draft a work sheet, and brief notes or adjusting entries which will indicate and explain the changes in form or content you would recommend, and (b) draw up the reserve, capital stock, and surplus sections of the balance-sheet as at April 30, 1946, as they should be presented. In response to this question, the work sheets and balance sheet are given in the article.

Reviews the book "Advanced Accounting," 4th ed., by Roy B. Kester.

Reviews the book "Business Law—Principles and Cases," 3rd ed., by Harold F. Lusk.

Reviews the book "Preparation of Company Annual Reports."

Reviews the book "Principles of Accounting, Intermediate," 3ed., by H.A. Finney.

The article presents information regarding laws and legislation related to accounting procedures in savings and investments. In 1908, the State of New York Legislature, enacted laws which in effect and intent required savings banks and insurance companies to put bond purchases on the books at cost and thereafter to make correct entries as coupons. There was much opposition from the densely populated group in banking and accounting circles who never forget anything and never learn anything and even after the law had been in more or less successful operation for about two years a prominent Wall Street oracle, in a Bankers' Convention speech, denounced the whole scheme as "a delusion and a snare" and about the same time the "Commercial & Financial Chronicle," editorially attributed the existence of said law to the influence of "an evil genius" that had arisen. But the first important thing that happened almost immediately alter the enactment of the "Amortization Law" was a decree from the Banking & Insurance Commissioners at Albany, New York, whereby they catered to the lazy and ignorant by authorizing, if desired, the use of the "pro-rata method" instead of the correct one.

The business policies of a department store, like any other sound business enterprise, are finally decided by top management, generally the corporate officers or the Board of Directors. These policies, once laid down, must be administered by the next immediate echelon of operating personnel consisting of the merchandise manager, the general superintendent or store manager, the publicity director and the controller. One of the major problems in retailing today, from the controller's viewpoint, is that of adequate merchandise control. The emphasis has been the need for carrying such techniques through to the point of benefit to every branch of the business. There has been an attempt also to talk of speed—shorter time lapses between the occurrence of an event and the recording and reporting of that event—and finally there has been an attempt to tell that accounting, at least in an organization is a process of seeking the best manufacturing techniques to enable to produce a fast, dependable and low-cost tool which has a very positive effect on shaping business policies because it is not a dusty, historical record over which to hold post-mortems, but instead it is a live, current force from which such policies can be created.