Knowledge that Transforms

Reviews the book "Het Financiele Jaarverslag Van Ondernemingen," by J. Klaassen and H. Schreuder.

SFAS 33 requires certain companies to present historical cost/constant dollar data. The disclosures provide a data base against which to compare results achieved by the Davidson-Weil historical cost/constant dollar data estimation model. This Note reports the result of research that was conducted to measure the degree of variation between surrogate historical cost/constant dollar data generated by the Davidson-Weil model and historical cost/constant dollar data presented by 459 companies. The Davidson-Well model estimate of historical cost/constant dollar cost of goods sold was in excess of reported amounts by an average of .54 percent, the model estimate of historical cost/constant dollar depreciation expense exceeded reported amounts by an average of 13.73 percent, and the model estimate of the purchasing power gain/loss exceeded reported amounts by an average of 68.3 percent.

This paper reports the results of the experimental stage of a three-stage project which explores many aspects of auditors' involvement in their clients' financial forecasts. The experimental instruments include forecasting factors which were considered important by auditors and which closely paralleled two quite distinguishable corporate settings. Analysis of auditor judgments of the reasonableness of forecasts based on these corporate settings provides evidence which is consistent with the following general conclusions: 1. Models representing individual reasonableness judgments concerning the two cases were relatively well specified 2. The track records of management in forecasting accuracy for net income and sales were the most significant factors in the individual judgment models; and 3. Based on the judgment models employed in the analysis of the experiment, subjects' judgments appeared to be affected by differences in the background information in the two corporate cases.

Reviews the book "Illustrations and Analysis of Disclosures of Pension Information," by Hortense Goodman, Frank C. Munn, Anthony Phillips and Miklos Vasarhelyi.

Reviews the book "Financial and Accounting Handbook for Service Industries," by Jerome P. Solomon.

Reviews the book "Principles of Auditing," 7th ed., by Walter B. Meigs, O. Ray Whittington and Robert F. Meigs.

Reviews the book "Accounting Theory," by Ahmed Belkaoui.

This paper presents an extension of PERT/COST which cost accounting instructors can use as the basis for a one- or two-day review of the planning and control cycle. The article stresses performance measurement and responsibility accounting, but the illustrations provided can also be a useful vehicle for a class discussion of such thorny issues as (1) which costs should managers be held responsible for, (2) how should joint costs be allocated, and (3) should joint costs be included in performance reports?

This paper examines the account book of an Italian firm operating in London in the early 14th century. The existence of the book is well known to accounting historians, but it has not previously been carefully studied by them. The history of the firm and of the book are discussed, followed by an examination of the treatment of cash and non-cash entries and of opening and closing procedures. The presence of accounts for joint-ventures, petty cash, expenses, profit, and capital; the use of a single monetary unit; the consistent method of recording; and the achievement of balance at the end of an accounting period are features that may justify a claim that this account book was part of a double-entry system.

Reviews the book "Cases in Financial Reporting," by Charles H. Gibson and Patricia A. Frishkoff.