Knowledge that Transforms

Abstract This article comments on a 1977 article by researcher B.E. Cushing on financial reporting. Using the article as a point of departure, it attempts to clarify what can and cannot be said about the individual's choice to "use" information, public or private, the potential effects of its public availability, and what factors are relevant to predicting the welfare impact of an accounting policy change. Cushing attempts to work in a general equilibrium framework to evaluate proposed changes in accounting standards. He defines an accounting principle to be optimal if "the resulting financial statements enable all users to achieve an expected payoff which is greater than or equal to the corresponding payoff under any alternative accounting principle, holding the principles used in all other areas of controversy constant." A central contention in Cushing's article is that the assumptions of individual rationality and publicly available information allow one to consider financial statement users only.

Abstract Reviews the book "Zero-Base Budgeting: A Planning, Resource Allocation and Control Tool," by James W. Pattillo.

Abstract Reviews the book "Financial Accounting," 3rd ed., by Walter B. Meigs and Robert F. Meigs.

Abstract ABSTRACT: Shih [1979] recently proposed a general decision model for CVP-analysis under uncertainty, and he presented three major results for the model: (1) derivation of profit's probability distribution, (2) formulas for computing profit's mean and variance, and (3) formulas for determining the production quantity to maximize the probability of achieving a target profit. The purpose of this Comment is to present simpler and more general formulas for Shih's problems (2) and (3). These formulas considerably enhance the practicality of Shih's model.

Abstract ABSTRACT: This paper gives certain fundamental portions of accounting theory--as it is currently understood and practiced--an axiomatic formulation in predicate logic. The nature of deductive systems is first described. Then the basic vocabulary of accounting is constructed from a base of primitive terms. A set of axioms is introduced and the rules of inference to be employed are enumerated. Theorems stating certain salient characteristics of financial position and income are then derived within the system. Finally, a prospectus is offered for further axiomatic research in accounting, including possible extensions of the system presented here.

Abstract Reviews the book "Establishing Controls and Auditing the Computerized Accounting System," by Elise G. Jancura and Robert V. Boos.

Abstract Reviews the book "Direct Costing," by William E. Arnstein and Frank Gilbert.

Abstract ABSTRACT: This research compares (1) current efforts to prepare doctoral candidates to be educators and (2) departmental administrators' perceptions of the need for educational training. One questionnaire was mailed to doctoral program directors of schools offering doctorates in accounting and another was mailed to department administrators of schools offering undergraduate and graduate degree programs in accounting. Analysis of the responses indicates that differences exist between the level of training in teaching currently provided in doctoral programs and the perceived need for such training by departmental administrators. Eighty-three percent of responding departmental administrators felt that teaching skills received inadequate attention in doctoral programs.

Abstract Reviews the book "Overhead: What It Is and How It Works," by Jack F. Fultz.

Abstract Reviews the book "Recognition of Contractual Rights and Obligations," by Yuji Ijiri.