Knowledge that Transforms

Accounting is a utilitarian function in our economic society. Accounting reports are sought as sources of information to help people make decisions about the entities for which the reports were prepared. Logically, then, the principles underlying those reports should be selected so as to facilitate decision making by the users of the financial statements. The search for accounting principles should be decision oriented. It should begin with an identification of the uses to which accounting data are being put and logically might be put. Both the potentialities and the limitations of accounting should be recognized. Accountants should not balk at reporting market values if these are found to be useful for decision making and are measurable. On the other hand, accountants should not be prodded into providing forecasts and reporting them as verifiable facts. Utility is both an approach to the formulation of accounting principles and a criterion for the evaluation of principles. An attempt was made here to test the principle of historical cost against the utility criterion, and the conclusion that this principle is not useful for decision making seemed clear. Similarly, the concept of uniformity of accounting principles was examined and found to be useful. Such tests should be made and reviewed regularly. As circumstances and business practices change, it is possible that the content and format of useful accounting reports will change. The need for useful information, however, will never change. It is the continuing challenge which a dynamic profession must constantly strive to meet.

Reviews the book "The Accounting Sampler: An Introduction," by edited by Thomas J. Burns and Harvey Hendrickson.

Reviews the book "The Impact of Systems and Computers on Management and the Accountant," by C.G. Edge, L.C. Roy, and P.J. Sandiford.

Understanding of the significance of the distinction between the definition and measurement of income may be improved by an awareness of the structure of the process by means of which one moves from the abstract region of theoretical constructs to the reality associated with operational definitions. Once this structure is perceived, alternative empirical pro positions which are considered relevant to the income concept-specificially those found in the technical literature of accounting and economics-may be attached to this skeletal framework for purposes of experimentation and evaluation. In this manner, one would expect important empirical issues to be more clearly identified, and direction thereafter to be given to research aimed at explicating the apparent consequences and relative weights of these issues. Not unexpectedly, problems beset this rather unique approach to the analysis of income metatheory at both stages. In the absence of rigorous quantitative expressions of initial, intermediate, and final states of reasoning by the individual theoretician or practitioner, the structure of this theory cannot be directly induced from explicit formulations. Perforce this leads us back one step to the formulator himself-about whom current research into the nature and simulation of human thought processes has provided some interesting insights and hypotheses for our problem. With the additional aid of several observations concerning research methodology, measurement processes, and purposive behavior, a tentative structure was outlined. In the second stage of our overall approach, the principal problem is one of dimension. Even delimiting the area of our attention to accounting and economics, the number of empirical propositions is untenably large.

Reviews the book "Analytical Auditing," by R.M. Skinner and R.J. Anderson.

Reviews the book "Planning and Control With PERT/CPM," by Richard I. Levin and Charles A. Kirkpatrick.

This article presents a critical evaluation of the accounting curriculum by both accounting educators and practitioners. A survey was made of accounting professors throughout the nation. The specific objectives of this study were, first, to determine what is presently being done with respect to governmental accounting in the curriculum and second, to determine the opinions held by accounting professors of the value of a course in governmental accounting. This report is based on the above mentioned survey, in which a questionnaire was mailed to one accounting professor at each of the 105 member schools of the American Association of Collegiate Schools of Business. Results indicate, two schools indicated they had recently moved the course to a graduate level elective. Two schools had eliminated it and moved the area of fund accounting to another course. One school had removed it from its day program but continued to offer it at night. One school had replaced governmental accounting with a required course in accounting systems and data processing and one school was offering the course this year for the first time in ten years.

The article focuses on the controversy regarding the nature of education and the means by which a state of being educated is achieved. The education of the individual consists of the impact on his mind of the entire stream of phenomena encountered during his lifetime. Formal education is only one sector of the whole process, and presumably not the most important element in many cases. A school should be regarded as a specialized undertaking, not as the embodiment of all human experience and activity, in a miniature. A school should concentrate on the training and learning that can be accomplished more speedily and effectively in an institutional setting than through general day-by-day experience. Moreover, the school should not only restrict its efforts to fields which lend themselves to attack in classroom and laboratory but should give primary attention to subjects that are acknowledged to be especially significant and worthwhile. In making a start on the task of sets ting standards for selecting subjects to be taught it may be helpful to take note of some broad principles.

Reviews the book "Management Services Technical Study," vol. 4.

Reviews the book "Managerial Accounting," by Carl L. Moore and Robert K. Jaedicke.