Knowledge that Transforms

Abstract ABSTRACT Self-regulation in any profession is built around a code of ethics. The accounting profession has a code of ethics that has evolved over many years and is still in the process of change. Contained in this code are the norms and values of the profession. Many states now require CPA candidates to write a separate examination in accounting ethics. One source indicates that as of 1970, thirty-three jurisdictions had such a requirement. Considering the importance of ethics to the accounting profession, what role do colleges and universities play in teaching the code to students? How and in which courses are accounting ethics taught? This paper reports the results of a survey designed to find answers to questions related to the teaching of accounting ethics to undergraduates.

Abstract Presents a letter to the editor in response to an article related to regression analysis.

Abstract The article presents information on first step toward a theory of human resource value in formal organizations. This theory seems to have relevance to accounting's objectives of measuring and reporting information for decision-making, management of human resources, custodianship of human resources and social controls over the utilization of people. Thus, the model can potentially help enlarge the scope of accounting in accordance with the recommendations in A Statement of Basic Accounting Theory. There are, of course, some limitations involved in the model. First, the model's scope is restricted to the nature and determinants of an individual's value to an organization. Thus it should not be inferred that the model purports to explain the value of groups of people in formal organizations. Similarly, it should not be inferred that the model purports to fully explain the nature of an individual's value. Future research may find that other variables should be included or that present variables are unnecessary.

Abstract The article discusses forecast evaluation in accounting. Accounting data are often used in the development of forecasts and accountants are often called on to make forecasts. Development of a variable overhead rate per direct labor hour may, for example, be viewed as development of a forecast--whether it is used in a standard cost system, in a budget, or in a product mix decision. Similarly, establishment of a depreciation policy requires a forecast of service life. Furthermore, the ability to forecast some specific outcome has been offered as a criterion for selection among accounting alternatives. But, whatever its ultimate purpose, development of a forecast constitutes a decision--a conscious choice among alternatives. The concern in this paper is limited to this decision aspect of forecasting. In particular, in the first section it is demonstrated that selection among forecast alternatives is a subset of the accountant's general problem of selection among information alternatives. Following this, characterization is done of prevailing methods of selecting among forecast alternatives as a simplification of the basic information choice problem. The paper then concludes with two illustrative simulations.

Abstract The article presents information on accounting curriculum in the U.S. In 1969 the American Institute of Certified Public Accountants Committee (AICPA) on Education and Experience Requirements for Certified Public Accountant recommended four-semester hours of computers and information systems in business, preceded by a two to three-hour course, introduction to the computer, as part of a model program for a four-year undergraduate degree in accounting. The five-year preferred program would increase the systems component to six hours. These specific recommendations followed similar suggestions made over the years by various committees of both the American Accounting Association and the AICPA. Rapid developments in the areas of systems and electronic data processing and their identification with accounting information processing and analysis demand that, beginning accountants have a firm understanding of the basic concepts, principles and uses involved. The rate of implementation of required courses in EDP and in systems must be accelerated if these needs are to be satisfied. Twenty-eight schools required one of the courses and had the second available as an elective.

Abstract In this article the authors solicited responses of questions relating to dissertation experiences of individuals who were awarded a doctoral degree with a major or emphasis in accounting during the period of September 1, 1965 to August 31, 1970. Questionnaires were distributed to 397 Ph.D. or DBA recipients from forty-four universities of which 297 (75%) of the questionnaires were returned. The first step in compiling the list of doctoral degree recipients to whom questionnaires were mailed was to identify those universities in the United States which offered accounting doctoral programs during the period of September 1, 1965 to August 31, 1970. This was done primarily by combining the lists of such universities reported by authors William F. Crum and Ralph W. Estes. Sixty-one universities were thereby identified as possible grantors of doctoral degrees in accounting. Of the sixty-one universities asked to provide names of degree recipients, forty-five did so, ten replied that they had granted no such degrees, and six failed to reply.

Abstract Reviews the book "Cost Accounting Planning and Control," 5th ed., by Adolph Matz, Milton F. Usry and Othel J. Curry.

Abstract The article reports that writing for a public accounting practitioners' magazine requires a style different from that common in educators' publications such as The Accounting Review and the Journal of Accounting Research. This distinction is a main point of this article. The term "style" as here used includes not only the language but also certain other aspects such as topics and method of treatment. The basis for this article stems from the author's observations over a period of about 11 years as editor of The New York Certified Public Accountant, now The CPA Journal, published by the New York State Society of Certified Public Accountants. In this time about 600 manuscripts were received from educators and 250 were published. The rejections were due to a number of reasons, none on the ground of poor quality of writing. Rather, they were due to material, irremediable reasons later discussed. It is hoped that this discussion will serve to reduce, if not avoid, the vain expenditure of writers' time, effort and expense in preparing articles for submission to practitioners' magazines.

Abstract Reviews the book "Financial Accounting: The Main Ideas," by Arthur L. Thomas.

Abstract The article suggests an improvement in the accounting field of mix variance. Mix variances arise when factor input combinations of raw materials or grades of labor differ in composition from the standard mix. It is also used to analyze sales or contribution margin when actual mix differs from budgeted mix. The primary intention is to propose a different structure of raw material variances where the standard mix is intentionally abandoned in the short-run due to raw material price changes, causing a different combination to be optimal. Criticism of the mix and yield variances and proposed recasting for the above situation follows the first portion of the paper which is devoted to the planning function. In terms of the planning-performance- control cycle, if output can be attained with different mixes of materials inputs, decisions can be implemented by means of mathematical models such as linear programming. In conclusion, it is apparent that the traditional materials mix and yield variances suffer from an advanced case of technological obsolescence.