Knowledge that Transforms

The attractive qualities of accounting as a study and as an applied art greatly appeal to many people. It follows that the student about to decide on a career should be told about some of accounting's often overlooked attractions and some of the seldom-mentioned personal characteristics of the men and women who professionally practice it. In the realm of intellectual endeavor, the same thing is true of accounting to a far greater degree than the uninitiated ever realize. In almost all fields of performance, successively greater achievement is closely inter-related with measurement. Mount Everest was climbed because it was there as a challenge. In a sense, records are broken because the measurements are there. Man is the animal that measures and compares. Although professional accountants and professional management are mindful of it, the laity has little conception of the fact that without accounting the nation's business could not possibly be organized on its present scale. Like athletes or teachers or doctors or ministers, no two accountants are alike. They differ in their grasp, their depth, their approach, their thinking, theft mode of expression.

Despite individualism, there is a social minimum in the U.S. It is a minimum living standard below which one will not consciously allow anyone to go. But far more than barely exceeding a minimum social responsibility and merely preserving the weak, enlightened self-interest brings about a positive approach. First of all, it is proposed that preventive measures are more economical than relief of human wreckage, and secondly, that industry must recognize its responsibility in bearing the burden of all the costs of productive enterprise. The alternative is government assumption of this responsibility. As the economic cost of production must include depreciation of plant and equipment, so must it include depreciation of labor or human effort. It is with inexorable human depreciation which results from oncoming old age, that this article is mainly concerned. The cost of retirement cannot be avoided by the failure of industry to absorb all of its share in current operations. For then the cost may simply be shifted to the community in general and will return in substantial measure to the producing entities.

Reviews the book "Management Accounting," by Robert N. Anthony.

The article discusses the price level changes, inventory valuation and tax consideration. This article attempts to illustrate the differing tax liabilities which result from various combinations of inventory valuation method, rate of price change, turnover rate, and markup rate during a broad range of historically based inflationary and business cycle price movements. Differences in cost of goods sold become differences in profit before tax figures. The greater the size of the price movement, the greater the differences that will result from the use of alternative inventory valuation methods. The application of the Fifo method results in higher tax liabilities than the amplication of Lifo, both for the total period and for each individual year of the period, because prices rise throughout each case. All major variables and the manner in which they combine must be considered before judgment can be made on the significance of differences in tax liabilities resulting through the use of alternative inventory valuation methods. Differences in tax liabilities which result from alternative inventory methods follow variances in profit figures. In those situations in which profit figures are significantly different, variances in tax liabilities produced by alternative methods are important.

If we could combine an effective inservice accounting instructional staff- training program with a well-supported professional faculty development program, we in accounting education would have an unlimited potential for greater usefulness to our institutions and the wide range of public interests which they serve. Perhaps the discussion which has gone on, and which will continue, will serve to bring the weak spots into sharper focus and encourage all of us to greater effort for the common good.

The scarcity of qualified teachers, which is expected to become more acute in the years ahead-is the basic reason for offering any course by television as opposed to conventional methods. The decision to experiment with the offering of courses by television at Penn State was encouraged by a grant from the Ford Foundation's Funds for the Advancement of Education. A standard, widely-used textbook was employed for all sections of the course. It is felt, however, that any of several recognized elementary accounting texts would have been equally adequate. Although not used to any great extent it is possible to show films, slides, and film strips. Also by the use of a suitable projection device it is possible for the television screen to show the instructor writing on a regular-sized sheet of paper. One disadvantage of teaching by television as opposed to conventional methods is that, under most conditions, the conversation is one way. There can be no discussion or answering of the students questions.

Reviews three books on taxes. "Introduction to Income Tax Law, Canada," by Francis Eugene LaBrie; "Fiscal-Year Reporting for Corporate Income Tax," by W.L. Crum; "Federal Estate and Gift Taxes," by Charles L.B. Lowndes and Robert Kramer.

The article focuses on the preparation and qualifications of accounting teachers. When increasing the quantity of teachers is a factor of prime importance, it is unsafe to rely on the love of teaching to fill potential needs. The teaching career may well have been generated by the lack of alternative opportunities, rather than by strong interest or compelling desire. Some present teachers, a bit older, come from the period when competition from industry was not so great, when beginning salaries for teachers were even somewhat above those offered in public accounting and other businesses. A more effectively competitive beginning salary, may be regained if and as adequate funds are available, is a strong consensus that to assure increased quantity, and even reasonable quality, of beginning teachers there must be sharp increases in financial inducements. In any realistic discussion of the qualifications of accounting teachers one must relate the cost of preparation in time, money and effort to the probable financial and other returns on such costs.

Reviews the book "Electronics in Business-A Case Study in Planning: Partt of New York Authority," by Herbert F. Klingman.

Many accountants, both in public and private accounting, have been striving mightily in recent years to see their way through the maze and mists of electronic data processing. To some extent, the highly placed controller or the partner public accountant will be able to dodge the necessity for this new learning by delegating it to the "systems" or department. Controllers discharging this responsibility through their systems departments have the direct responsibility for determining the feasibility of adoption of some electronic data processing layout. Public accountants, if they are rendering management and systems service, face the same problem of adoption and installation with and for their clients. In many respects, the present situation is not unlike that faced by the public accountants twenty-five years ago when punched card accounting techniques were sweeping into the accounting office. For the fully "electronified" areas of the accounting system there will be virtually nothing left of old on-the-scene audit techniques.