Knowledge that Transforms

Internship training in accounting is not a recent development. Several schools have had such programs in successful operation since the middle thirties. Cooperative training programs with industrial organizations, although not on as broad a scale, have been in existence for many years. Many employers view an internship program as a situation where they obtain part-time help to assist them in a busy season or during periods when regular employees are on vacation. They consider their part of the program merely to give the trainee a place to work and to pay him the usual rate for work of the type performed. The trainee learns only what he is able to observe. Firms of this nature should be avoided for internships. An internship program will place extra responsibilities and work on the employer but there are advantages to him that more than compensate for this additional trouble. In summary, the main points can be stated as: (1)Internship training programs have definite advantages to the student, to the cooperating business organization, and to the school. (2) There are no real disadvantages connected with internship training. Most of the difficulties encountered are the result of (a) poor selection of participants, (b) inadequate planning on the part of the school and the cooperating business, and (c) insufficient supervision and follow- through. (3) Internship training programs will require more work from the student, the representative of the cooperating business, and the university faculty. The results are well worth the added trouble. (4) Industrial internships have great merit and should receive increased attention from educators and industry.

Reviews the book "Intermediate Accounting," by Arthur W. Holmes and Robert A. Meier.

Reviews the book "Estate Planning," by Joseph Trachtman.

Reviews the book "Depreciation," by Eugene L. Grant and Paul T. Norton.

Reviews the book "Income Tax Procedure," by J.F. Sherwood and C.R. Niswonger.

Reviews the book "Management Planning and Control," by Billy E. Goetz.

There is abundant evidence that the cost accountant's traditional approach has been strongly influenced by classical and neo-classical economic theory. With the possible exception of specific order industries the general prescription that management should concentrate on those items which yield the largest markup is based squarely on the assumption of pure competition. Clearly in pure or near pure competition with unlimited demand for the firm's products at going prices management is well advised to push- in a production sense-those items which yield the largest markup. The extension of this prescription to products to be sold in areas of imperfect competition seems to be just as dearly unwarranted. Businessmen and accountants, particularly, have often argued that production and distribution cost accounting gives the key to decisions as to which lines, products, territories, etc should be pushed through increased advertising expenditures and other sales pressure. The fact that sales effort is necessary is an indication that the products are differentiated and that the demand for each product is not completely elastic. Intelligent pricing and sales-pressure decisions must give full consideration to estimates of demand elasticities and to the probable reaction of demand schedules to changes in (and different types of) advertising and other selling methods.

A critical analysis of practice is not the only basis for a good theory. Nor must theory be completely applied to a practical situation in order for it to be considered good theory. A body of thought which may be developed from accounting practice and which is logical in all respects may be said to be derived largely from practice. But it must be compatible with the purposes of accounting and it must not be in controversy to other aspects of accounting. "Developments" in accounting theory and practice refer, primarily, to the degree to which accounting theory and practice is disclosed and applied. Perhaps it is more important to consider such developments as referring to the application to practice of latent theory, the discarding or revision of old theory, or the evolution of new theory. In any case, the existing theory would be available for continued application in practical situations to the extent considered appropriate.

In the current controversy over the use of the LIFO and the FIFO plans in inventory valuation, it has apparently not been generally recognized that each of these plans, as well as the "base-stock" plan, is based on a different set of expectations as to the life of the inventory and as to the future course of prices. Examination of the set of expectations implicit in each plan may help to determine which method should be used in a given situation. At least such an examination will help to clarify the economic issues involved in the debate. It will be helpful to consider first a method of inventory accounting not now much involved in the income controversy, although closely related to one of the disputed methods. This is the "base-stock" plan. Under this scheme there is assumed to be a minimum working stock which the firm must maintain at all times in order to continue doing business. Since this basestock cannot be sold without immediate replacement, the firm cannot convert the inventory into more liquid form by selling any or all of it when the market price rises, nor need it acquire more liquid resources to cover a loss when market price declines.

The study of accountancy may be said to possess three primary use values: (1) as a foundation for a professional career in public accounting, (2) as providing knowledge of an information service for business management and investors, (3) as one way of leaning disciplined thinking about dealing with data. The first two uses are well known and need no elaboration here. The third use value is the sort usually attributed to mathematics and statistics. But accounting also insists on accurate identification of detail and the organization of data in a meaningful way. Its study at the university level provides some of the same kind of beneficial discipline as these other subjects, and therefore it possesses general educational values in addition to the more strictly technical values for students of business management and professional accounting. Use values such as these have been clearly recognized as lying in the study of accounting. Because of this, there has been a widespread acceptance of the subject matter as useful outside of a purely occupational framework for a career in accounting as such.