This article presents a study on the discriminant analysis as an aid to employee selection in public accounting in the U.S. The employment function of large certified public accounting firms statistically assists the employment manager by predictively eliminating unacceptable applicants from his consideration. In so doing the analysis allows a larger number of the applicants' qualities to be evaluated simultaneously than are possible through the mental processes alone. Consequently, the manager is able, on the average, to hire a larger proportion of superior applicants who will work harder and remain with the firm longer. The level of experience and abilities for the firm's personnel increases in each functional area within the firm, thereby increasing the quality and quantity of the firm's output.
Presents information on a study which examined various audit interrelationships involved in financial statement examinations. Interrelationships of financial statements, internal controls and audit program; Nature of auditor's examination; Conclusions.
This article focuses on the effects of cost-volume-profit structure on full and direct costing net income. The purpose of the article is to provide a framework for such comparisons. First, the authors identify several important variables which affect the percentage difference between absorption and direct costing net income. These variables include the relative mix of manufacturing versus nonmanufacturing fixed costs as well as the relative differences between production and sales volume. Second, these variables are normalized so that the impact of alternative C-V-P structures can be readily determined.
This article presents comments on an article describing a very useful algebraic teaching aid to explain the differences between the direct costing and full-absorption costing models, written by Don T. DeCoster and Kavasseri V. Ramanathan and published in the October 1973 issue of the journal "The Accounting Review." This assumption leads them to analyze a very special situation in which the overhead charged against profit under absorption costing is the volume variance rather than the more general situation in which the total overhead variance is charged against profit. it may be seen that the difference between the two income measures is the same as that developed by DeCoster and Ramanathan. The adjustment of the DeCoster and Ramanathan discussion for these two changes should be beneficial because students have frequently been introduced to budgets and variance analysis under full-absorption costing before variable costing is discussed.
Presents a reply to comments made by Barry E. Cushing and Edward B. Deakin on a study about the characteristics of companies that are making accounting changes. Concerns over the size hypothesis; Industry analysis of accounting changes.
This article focuses on a study that developed an empirical evidence concerning the adequacy of disclosure in published corporate annual reports of the U.S. Disclosure is the process through which an entity communicates with the outside world. The significance of proper and adequate corporate disclosure cannot be overemphasized in a free economy where the market allocates the resources to different sectors of the economy. Lack of adequate disclosure can create ignorance in the securities market and can result in misallocation of resources in the economy. The U.S. Congress realized the importance of adequate disclosure and its need in protecting investors' interests when it passed the Securities Act of 1933. In fact, the Securities Act has often been called a disclosure statute. However, the literature in accounting suggests that the present corporate disclosure practices are not satisfactory. Investors and their counselors are dissatisfied with published corporate reports and they often resort to sources other than corporate financial statements for needed information.