Knowledge that Transforms

Abstract This article focuses on a study which analyzed an organizational disagreement in merged organizational structure in the public accounting firms. The growth of the public accounting profession has been at a time in history characterized by phenomenal changes in organizational structures. Within the theoretical modes of professional and bureaucratic organization there are common and mutually exclusive characteristics. The impact of these characteristics within the firm may confront the individual accountant with divergent organizational orientations. Large public accounting firms appear to be unique since no other currently known profession has been able to develop professionally through the widespread use of nationally or regionally organized offices. Maintaining a large organization, whatever the purpose, through chains of delegated authority and responsibility reflects an organizational complexity which, at some point, emerges into a pattern identified as bureaucracy.

Abstract This article focuses on a study which illustrated how sensitivity analysis can serve as an aid in improving the basis for management decision making. Freedom from uncertainty is a luxury rarely enjoyed by the contemporary manager. In a society characterized by change, uncertainty is an established and accepted fact of life. Sensitivity analysis is a study to determine how possible changes or errors in parameter values affect model outputs. The prime function of sensitivity analysis may be said to be to facilitate a better understanding of risk. Specifically, sensitivity analysis tests the responsiveness of model results to possible variations in parameter values, and thereby offers valuable information for appraising the relative risk among alternative courses of action. Implicitly or explicitly, managers have actively employed sensitivity tests for appraising relative risk of alternative courses of action from the earliest stages of business development.

Abstract The article focuses on the concept of materiality in accounting. According to accounting principles, there should be a general presumption that all items of profit and loss recognized during a period should be included in the determination of net income. The only possible exception represents items that are in the aggregate material in relation to the company's net income and clearly not identifiable with or result from usually typical operations. Such items may be included from a determination of net income and further, they should be excluded when their inclusion will impair the significance of net income so that misleading inferences might be drawn therefrom. In the main categories of extraordinary items, practice is so diffused that the size of an item in relation to net income appears hardly to have any important effect on whether an item is included in or excluded from, the determination of net income. The concept of materiality, when generally expressed, is simple to understand. However, when it is made a central concept in the application of accounting principles, a lack of specific definition converts it into a prime problem area.