Knowledge that Transforms

Reviews the book "Investment Analysis and General Price-Level Adjustments," by T.R. Dyckman.

Reviews the book "Principles of Management Science, With Applications to Executive Decisions," by Harvey M. Wagner.

Reviews the book "Accounting for Control and Decisions," by Arthur Holmes, Robert Meier and Donald Pabst.

Reviews the book "Studies in Cost Analysis," 2nd ed., by David Solomons.

Reviews the book "Business Decision Theory,' by Paul Jedamus and Robert Frame.

Abstract The article presents information on the Seminar in Accounting Research at the University of Iowa. Universities are placing increasing, and we think appropriate, emphasis upon research by faculty members. Particularly at the graduate level, ideas are volatile and subject to continuing revision. In seminar discussions, student comments take priority over faculty comments. Similarly, student papers have scheduling priority over faculty and professional contributions, with an exception made for outside guests when conflicts arise. Participants in the Seminar are, on a regular basis, graduate students in accounting and the accounting faculty. Between faculty, even "unfair" comments are allowed, but restraint is exercised in arguing with students. Faculty participation, in the manner indicated, helps to erase the illusory distinction between teaching and research, and between faculty and graduate students at the graduate level. The Seminar in Accounting Research links the diverse interests of the faculty to a common educational goal.

Abstract This article applies some elementary principles of mathematics and statistics to a discussion of depreciation, and in the process casts light on several problem areas. New formulas are suggested for sum of the year's digits and double declining balance methods of depreciation. Finally, the assignment of cost to depreciation is examined using the tools developed in the first part of the article. This discourse seeks to supplement the presentation of depreciation for students who have some quantitative background, since most students appreciate finding applications of mathematical concepts, which by them may seem esoteric or irrelevant. A depreciation density twice lion is a real-valued, non-negative, continuous function. Depreciation depends on a multitude of factors. Since consistent methods of depreciation depend only on the fraction of total life exhausted and not on the total lifetime of an asset, it is possible to compare different methods of depreciation on one graph. The analogy between depreciation and a probability distribution was exploited in the article. It was shown how some problem areas were illuminated using the tools developed. But in a discussion of accounting that makes use of any concepts of mathematics or statistics, it should be remembered that mathematical niceties or rigor can never be substituted for what is economically relevant.

Abstract Decision tree, critical path or logical fan notations are becoming more and more recognized as useful tools for communicating complex issues. This is particularly true as the current generation of students matures with some introduction to these techniques, as well as to computer flow-charting and programming, which is but another notation of the same logical approach. Taxation, of course, offers numerous complex concepts, the teaching of which can be greatly aided by logical diagrams. One wonders why complex sections of the law itself are not defined in such a manner instead of in the traditional legalistic gobbledygook. The use of such diagrams for, as one example, child and disabled dependent care expense deductions either as a transparency projection or as a mimeographed handout can greatly improve the communication problems in taxation lectures. The diagram in this article has been used successfully in presenting this complex personal deduction. According to the diagram as represented in the article, a man is a widower if his wife has died and he has not remarried, he is divorced and has not remarried, or he is legally separated from his wife under separation decree. A wife is incapacitated if she is either mentally or physically incapable of taking care of herself or institutionalized for at least 90 consecutive days or until her death, if earlier.

Reviews the book "Studies in Accounting for Management Decision," edited by A.M. Bourn.

Abstract This report investigates the conceptual desirability of maximizing the consistency of the measurements and reports of the control and planning functions. The committee on managerial accounting interprets the term "consistency" among processes (such as accounting processes, decision processes, planning processes, control processes etc.) to mean that these processes are regulated by similar sets of rules. Thus, there would be consistency between the accounting process applied this year and the accounting process applied last year if these processes were regulated by the same sets of accounting rules. Data that are useful to the decision maker must necessarily be relevant and relevant data are necessarily consistent with the decision maker's task. Theoretically a firm should balance the cost of information with its value. Presumably increased consistency generally increases the cost of information processing. Time series consistency is essential if receivers of recurring reports are to be able to use them without comprehensive explanation of the nature of the data and the computations involved in their preparation.