Knowledge that Transforms

The article discusses the need for more systems content in the accounting curriculum and the need for systems education in the elementary accounting course. It is readily agreed that the main aim of accounting is to provide management with reports on stewardship and responsibility. It is difficult to comprehend any reporting system that exists without a solid foundation of an efficient, well-constructed accounting system. It would seem that all suggestions for revised accounting curricula will eventually center upon the non-major. It is the opinion here that this type of student will also benefit greatly from the type of course to be suggested. A knowledge of systems is essential for this student, since systems breed coordination and with it, a de-emphasis of the planning function and the decision-making power and personal responsibilities of all but the top planners and decision makers. Systems analysis and data processing is the direction in which the greatest additional coverage is to be given.

Reviews the book "Inter-Economy Comparisons: A Case Study," by Leonard A. Doyle.

At the start of this project, the authors were motivated by one primary objective--to determine what effect, if any, the gradual rise in the general price-level of the U. S. economy during the decade 1953-1962 would have on the financial statements of a large manufacturing company--Cummins Engine Company. If the results had disclosed only immaterial variations, the study would still be considered of value, for it might then support an argument against purchasing power accounting. On the other hand, if the variations followed the same pattern of results reported by the American Accounting Association study, advocates of price-level accounting would have increased support for their case. The results of this study actually showed a moderate change in the financial position and operating results of the subject Company. Three reasons for such results may be cited: 1. The purchasing power of the dollar has experienced a steady, slight downward trend during the 10 year period of the study. This, of course, is the primary reason for the moderate results. 2. Cummins Engine Company has invested a substantial amount of capital in new machinery in recent years. Therefore, asset costs and the associated provision for depreciation more nearly approach December, 1962, dollars than might be found in a majority of companies investing heavily in fixed assets. 3. Because of its size, reputation, and strong financial position, Cummins has been able to carry large amounts of fixed debt, and thus has been able to create a substantial purchasing power gain on monetary liabilities. This hedge against the losses generally incurred on net current monetary items during periods of rising prices might not be elected or available to other companies. Throughout the period investigated, the rising price-level has shown its effect. Net income is decreased almost $4 million from what would have been expected solely from changes in the price level.

Reviews the book "Accounting Practices in West Germany," by Gerhard G. Mueller.

The versatility and possible usefulness of business games in accounting classes is obvious when researchers consider that accounting plays a central role in almost every management decision simulation exercise, just as it does in the management process itself. Sequential decision-making, which characterizes business games, requires periodic reporting of the effectiveness of simulated operations. The intimacy that exists between accounting and decision-making is the basis for the adaptability of business games for accounting courses. Researchers' observations have led them to conclude that business games can be effective teaching devices in accounting courses. A general management game can provide students with conclusive evidence on the important role which accounting has in the operation and evaluation of a business firm. Researchers have confidence that students and teachers alike will receive other games, specifically designed to provide practice and illustrations of particular procedures, enthusiastically. Even though the total experience on the use of business games as teaching devices in accounting is limited, the success achieved thus far clearly justifies further experimentation and trial.

This article discusses the challenges to the accounting profession. Accounting education is under pressure from a number of directions. It is caught in the current criticism of all undergraduate schools of business that education for business generally is not sufficiently rigorous, that it has neglected the basic disciplines, that it is too specialized, that it emphasizes procedures and descriptions rather than being analytical in nature, and that all in all it has forsaken the liberal approach and ought to be revised substantially. Professional accountants question accounting education on other grounds. They continually seek not only professionally oriented programs but professional stature as well and are concerned lest the absence of professional schools have undesirable implications, both educationally and prestige-wise. From the functional fields of business, which are agreed that all students of business should have some acquaintance with accounting, one receives complaints that the elementary courses are intended primarily for accounting majors and fail to give non-accounting majors the kind of familiarity with accounting that they need for their purposes.

Reviews the book "The Rise and Decline of the Medici Bank, 1397-1494," by Raymond De Roover.

The article presents problems that were prepared by the Board of Examiners of the American Institute of Certified Public Accountants and were presented as the first half of the Certified Public Accountants examination in accounting practice on May 12, 1965. The candidates were required to solve all problems.

The article focuses on a study made at the University of North Dakota which was designed to arrive at an evaluation of the internship plan as it is employed in public accounting and to develop current data concerning ways in which internship programs are operated and the extent to which they are offered. Accounting professors expressed the opinion that the internship program does strengthen relationships between practitioners and members of the accounting faculty. Ninety-nine per cent of the participating former interns would encourage present-day students to engage in similar programs. The guidance value of internships was demonstrated, as 9 out of 10 former interns indicated that these programs either heightened or reduced their interest in public accounting as a career. In a majority of the cases, students received valuable experience in participating in interviews prior to placement. Orientation programs proved to be valuable, interns were shown to be profitably employed in auditing or accounting duties 80% or more of the time. Seminars held in connection with the internship were not so effective as they should have been.

This article focuses on the booklet "Annotated Tabulations of College and University Accounting Practices" of the National Association of College and University Business Officers. This is an annotated tabulation of a study of questionnaires returned by 145 of approximately 1,500 institutions of higher learning selected to include all types, sizes, and locations. Its main purpose was to determine the extent to which institutions and their auditors follow the standards recommended in volume I, "College and University Business Administration," American Council on Education, 1952. Some of the important findings of the study are the following a high preponderance of institutions follow the recommended form of balance sheet in which the assets, liabilities, and fund equities are separated into balanced groups of related funds, a strong majority report restricted gifts as income only in the year and to the extent expended and the majority do not provide for depredation on any property; when provided for, the decided majority fund it as recommended.