Knowledge that Transforms

Reviews the book "The Equity Funding Papers: the Anatomy of a Fraud," by Lee J. Seidler, Frederick Andrews and Marc J. Epstein.

Reviews the book "Adaptive Behavior: Management Control and Information Analysis," by Hiroyuki Itami.

The article presents a new series designed to highlight accounting firms' publications of possible interest to academics. In recent years the largest public accounting firms have increased both the quantity and the quality of their accounting publications. Since such publications are ordinarily on topical subjects, they can be helpful to both the educator and the researcher. A Guide for Studying and Evaluating Internal Accounting Controls, published by Arthur Andersen & Co., uses five interrelated business cycles: treasury, expenditure, conversion, revenue and financial reporting, and a financial planning and control function to structure a framework based upon transactions for studying and evaluating internal control. Financial Statement Disclosure Checklist-1978 is designed to serve as a "memory jogger" for preparing and/or reviewing financial statements. Corporate Audit Committees: Policies and Practices reports the results of a survey of almost 1000 chief executive officers, internal auditors, independent CPAs, and non-officer directors and an examination of other publicly available information.

ABSTRACT: While current management accounting texts are in general agreement regarding the usefulness and general calculation methods for sales variance determination, they do not consider the effects of alternative product reporting classifications on the analysis. For sales variances, different product aggregations basically change the character of the analysis. For example, whereas a detailed analysis might show each product having a positive price change, an aggregated analysis could show a negative price change. The objective of this article is to indicate such possible effects and to make recommendations to avoid difficulties. Alternative analyses from a single data set are developed to illustrate the potential problems. Conclusions are that aggregated products should have margins as homogeneous as possible and that great care must be exercised in reports to indicate the level to which any mix variance applies.

Reviews the book "Fundamentals of Financial Accounting," by Glenn A. Welsch and Robert N. Anthony.

Reviews the book "A Tax on Wealth," by Mortimer Lipsky.

Reviews the books "College Accounting Fundamentals," and "Career Accounting Fundamentals," by Douglas J. McQuaig.

Reviews the book "Forecasting Methods for Management," 2nd ed., by Steven C. Wheelwright and Spyros Makridakis.

Reviews the book "Intermediate Accounting: Comprehensive Volume," 6th ed., by Jay M. Smith Jr. and Fred K. Skousen.

ABSTRACT: The impact of accounting earnings data on bond price behavior is examined for 85 bond issues over the period 1968-1972. Essentially, the study's results indicate that for convertible bonds, certain inferences drawn from stock market research may be extrapolated to this segment of the bond market. That is, accounting data appear to have information content for this market. The study's results concerning nonconvertible bonds indicate that accounting earnings data is incorporated in prices of nonconvertibles, but in a more diffused fashion.