Knowledge that Transforms

The article presents updates on accounting educators in the United States as of October 1, 1973. Joe R. Fritzemeyer, currently Director, Auditing Standards with the American Institute of Certified Public Accountants', has accepted the position of Chairman of the Accounting Department in Arizona State University effective with the Fall Semester 1973. Professors Robert Williamson and John Beverly of the Accounting Department have been promoted to the rank of Associate Professor in the University of Notre Dame. Assistant Professor T. L. Coe has accepted a position at New York University Graduate School of Business for 1973-74. Ruyji Takeda, Professor of Accounting, School of Business Administration, Kobe University, was a visiting research scholar in Duke University during the spring and summer of 1973. America. The Graduate faculties of Catholic University and the Graduate School of Business of Columbia University jointly conducted a conference on "Businesses' Role and Responsibility in Modern Society" August 5-17,1973.

The article presents a report of the 1971-1972 Committee on the Junior (Community) College Curriculum of the American Accounting Association (AAA) which provided recommendations to improve cooperation between community colleges and junior colleges. Students generally do not decide to major in accounting until their freshman or sophomore year in college. The number of students who transfer from community colleges to complete the baccalaureate degree with a major in accounting is steadily increasing. Two-year colleges are growing so rapidly that some day they may provide most of the introductory accounting education. The AAA should sponsor workshops, seminars, and/or courses that would acquaint community college teachers with innovative teaching methods as well as the significant concepts developed in recent years. The AAA should step up efforts to attract community college teachers to the regional and national meetings.

The article presents an update on issues related to the American Accounting Association (AAA). AAA created a manuscript contest that aims to encourage research among the younger members of the association. Funds will be made available by AAA in the future in order to provide salary support for members who conduct short periods of full-time research activity. Financial assistance grants will be made available by AAA for projects in the areas of educational accounting. A book will be published by AAA after the completion of its project on accounting education.

This article presents information on the attitudes of accounting educators towards the provisions of the AICFA code of ethics. Certified Public Accountants usually have received their first exposure to accounting ethics in accounting courses at colleges and universities. An educator's attitudes towards the provisions of the code may possibly influence his classroom presentation of the code. Consequently, the attitudes toward the code by professors who teach accounting ethics may influence the ethical behavior and attitudes of the practicing profession. Questionnaires were mailed to the accounting department chairmen of 14 universities that have undergraduate programs accredited by the American Association of Collegiate Schools of Business. These individuals were asked to respond to the questionnaire if they were involved with the course in which accounting ethics was taught; if they were not so involved, they were asked to give the questionnaire to the individual in charge of the course in which ethics was taught. Of the respondents 88% agreed that CPAs should not advertise and 89% agreed that CPAs should not attempt to obtain clients by solicitation. Most of the respondents appeared to feel that advertising and or solicitation were not functional.

The article explores the relationship between entropy measure and the perceived value of information and usefulness of the entropy application to financial statements. The amount of expected information from a message is determined by the amount of uncertainty or, more accurately, by the amount by which the uncertainty can be expected to be reduced as a result of receiving the message. After all, it could be argued by those who favor the presently suggested application of entropy to financial statements that the entropy measure may provide a reasonable approximation to the perceived value of information even though it need not be theoretically related in a systematic fashion to the actual value of information. When the decision situation and the loss from prediction errors are such that the expected value of information is monotone increasing with entropy, a highly positive correlation between the two was experimentally found. In this situation the entropy quantified a probability distribution that was made known to the subjects. But, as presently proposed in accounting, entropy is not intended to quantify a probability distribution of future outcomes relevant to the typical tasks of users of accounting statements.

The article reviews the book "Intermediate Accounting," fifth edition, by Harry Simons.

Reviews the book "Cost Accounting: Analysis and Control," 3rd ed., by Gordon Shillinglaw.

This article presents information on an experiment designed to test the usefulness of an alternative accounting model to one group of users, investors in common stock. The particular model tested calls for general price-level adjustments as well as restatement of accounts to current replacement costs. Subjects were given financial statements of actual companies and were asked to specify a holding period of one, two, or three years and then select the firm which they felt would produce the highest rate of return to the investor during this period. The subjects could also indicate that the company selected would be the same regardless of whether the holding period was one, two, or three years. In addition, subjects were asked to express a measure of the confidence they had in their choices and to place a hypothetical value on the price of the companies stocks. The results were then analyzed considering both the company and the holding period selected to see if subjects using current-cost financial statements made different and better decisions than those using only historical cost financial statements.

The article presents information on a simulation technique used to teach students about the interplay between organizational behavior and accounting performance evaluation measures. The simulation was intended to allow students to experience the interplay between organizational behavior and accounting performance evaluation measures. Through the simulation technique, students effectively understood such interplay. Moreover, the experience demonstrated the great potential educational value from employing incorporated teaching materials and methods across traditional course boundaries.

The article argues that bad debt expense does not meet the sufficient and necessary condition for membership in the class of data for measuring operating income for a firm. The main attribute of homogeneity is specified in the initial paper as an exchange (economic) transaction characterized by a reciprocal flow of consideration between the entity and another party which may assume the form of a group. Items such as taxes, financing costs, and revenues emerging from financial transactions in the case of the industrial entity, and certain extraordinary transactions likewise do not meet the prevailing tests or necessary character for inclusion in the class of data deemed relevant for measuring operating income from normal and recurring operations. The two forms of the financing arrangement should not be permitted to affect the primary revenue accounts or periodic operating income for the entity. Stated another way, the amount of operating revenue is the same irrespective of whether the entity receives cash immediately or a promise from the customer to transfer cash in the future. Finally, it is an observable fact that extant accounting treatment of bad debt "expense" includes it as an element in the measurement of operating income. Economic outputs, expressed in terms of a standard unit of money value, are not matched with financial balances (trade receivables) to measure income.