Knowledge that Transforms

Reviews the book "Managing People: An Introduction for Accountants," by David F. Robinson.

Reviews the book "EDP Audit Symposium: 1979/80 Proceedings," edited by Joseph L. Sardinas.

Reviews the book "Reporting Transnational Business Operations," by Francis A. Lees.

Reviews the book "Accounting Principles," by Roger H. Hermanson, James Don Edwards and R.F. Salmonson.

The article presents information on two recent publications related to accounting. "Evaluating Accounting Controls, A Systematic Approach" is designed to provide how-to guidance in a special evaluation of internal control. After an introduction, the next three chapters consider organizing the evaluation, evaluating the control environment, and evaluating the controls in the accounting system. This accounting system evaluation is based upon seven key applications including sales and accounts receivable, cash receipts, purchasing and accounts payable, cash disbursements, inventories and cost of sales, and financial reporting. Sample completed forms for purchasing and accounts payable are presented. "Financial Accounting Standards Board (FASB)--Summary of Activities--July 1973-March 1980," presents a summary of pronouncements, including exposure drafts and research reports, issued by the FASB to date. The publication is organized by type of pronouncement, and within each type summaries are in chronological order of issuance.

This paper examines the likelihood that U.S.-based multinational enterprises (MNEs) will alter their corporate structure in response to changes in U.S. tax policies towards income derived from direct foreign investments. If the deferral privilege is eliminated, it is probable that a number of corporations having foreign subsidiaries will decontrol part or all of their subsidiaries that retain the controlled foreign corporation (CFC) classification in order to avoid the additional U.S. tax burden. The most likely means for decontrolling these subsidiaries is by either selling additional common stock that has not been previously issued or by making a tax-free distribution of the CFC stock under Section 355. For the "average" subsidiary, decontrol will increase the net dividends to shareholders by approximately 20 to 25 percent. Decontrolling is more likely for subsidiaries that are incorporated and/or operating in low tax rate jurisdictions and which reinvest half or more of their earnings. For these decontrolled subsidiaries, the increased dividends available to the shareholders can be nearly six times as large as are the dividends when CFC status is retained following the repeal of the deferral privilege.

Reviews the book "Property Valuation and Accounts," by C.A. Westwick.

Reviews the book "The Pricing Decision," by Lawrence A. Gordon, Robert Cooper, Haim Falk and Danny Miller.

Reviews the book "Toward A Science of Accounting," by Robert R. Sterling.

This article describes the repair-replacement process of a product under warranty as a stochastic process and develops a model to estimate the costs due to warranty. The product is assumed to be made up of several components for which failure rates are available. Markovian states are defined dependent on the number of failures of each component. A replacement policy is superimposed, and an approach to obtaining the transition probabilities is illustrated when the failures are solely due to chance. The use of the model to estimate the warranty costs during an accounting period, when there are warranties outstanding for the products sold during prior periods in addition to the products sold during the current period, is discussed.