Knowledge that Transforms

Reviews the book "Handbook of Partnership Taxation," by Arthur B. Willis.

The article presents a study that highlights the separation within the group of functions of management from those of ownership and the concentration of the former in a few hands. It has resulted in fact in a large share of profits being retained in the business. The owners have little opportunity to dispose these profits as they would if the profit were all distributed in dividends. 29.4 per cent of their net income is retained within the larger corporation during the period 1922 to 1927. This retention may be intended to avoid shortages of liquid resources in periods of restricted business or to permit the continued payment of dividends in the absence of adequate current profits. But it also facilitates expansion without the necessity of issuing new securities. Those managers who find size attractive can satisfy their desire without having to submit their plans to the test of the capital market. The study asserts that if the corporation is to grow, investment opportunities must be deliberately created and continuously available.

Reviews the book "Internal Auditing," 2nd ed., by Victor Z. Brink and James A. Cashin.

Reviews the book "Mathematics in Business," by Lloyd L. Lowenstein.

Reviews the book "High-Speed Data Processing," by C.C. Gotlieb and J.N.P. Hume.

Reviews the book "Cost Data for the Management of Railroad Passenger Service," by Dwight R. Ladd.

In view of the increased attention being paid by the public accounting profession to managerial service engagements one can argue that really the public accountant of tomorrow must be both what he has been in the past plus having a training and viewpoint similar to that of an industrial or managerial accountant. This argument seems to have some validity. If it does, it would follow that the character of the Committee on Professional Education examination ought to continue to change and the pace of change should perhaps be accelerated. The emphasis of some questions could be shifted; the examination could be lengthened to include added subjects; or these subjects could be added and the time allotted to traditional subjects could be reduced. Of course the examination would still place heavy emphasis on traditional subjects such as auditing, commercial law, governmental accounting, taxes, and various financial, cost, and fiduciary accounting material. However, it might also emphasize statistical analysis, economics and economic indicators, managerial policy, controllership, budgetary and cost analysis and the like. It is recognized there could be some legal impediments to such changes, but these are not insurmountable.

Reviews the book "Statistics for Management," by B.J. Mandel.

In this article the author, consultant, General Electric Co., gives his views on training for an accounting career. It is a common hallucination that the existence of a training program implies that the process of education is also taking place. But it is not necessarily so. This is a constantly recurring concern with the financial training program in General Electric Co. The company has inaugurated a formal business training program in 1919, through which over 4,400 men have been subsequently processed. In that length of time, a person learns some things the hard way and, while many of the forms, techniques, methods and practices may change over the years, he does tend to cling to a few fundamental principles which seem to have proven themselves time and time again. The author also cites some general statistics of the company. The purpose is not to impress people with the scope of work in General Electric, but to orient people to the company's program. The responsibility of General Electric's financial management personnel, includes three broad areas: Managing, Personal Work, and Protect and Conserve.

Reviews the book "Budgeting: Profit Planning and Control," by Glenn A. Welsch.