Knowledge that Transforms

Leaders in the accounting profession have become increasingly concerned about the supply of broadly trained persons for top positions in accounting firms. Notwithstanding, many firms have neglected to devise programs for systematic development of staff to assume the growing leadership responsibilities inherent in modem public accounting practice. Too often firms are made up of groups of specialists. This tends to narrow the individual staff member's experience so that by the time he has progressed in the firm to where he is a candidate for top management responsibilities, it may be too late to give him the broad experience requisite for the executive position. This paper has presented a broad format which might serve as a guide to a programmed appraisal and guidance by accounting firms of staff member development. A periodic and orderly appraisal of staff members eliminates the hit or miss subjective way in which staff progression is plotted in many firms. It has been well stated that in a professional service, "jobs are people." A planned program of staff appraisal and guidance will assure that able men be given opportunities to gain the sequential knowledge so necessary for progression to top decision-making positions. It will also assure a firm that its operational, training, and promotion policies will always be under adequate control.

It is incumbent upon us as professional men to carry out our work competently and efficiently. We should re-examine our techniques in the light of the objectives to be attained as expressed not only in published literature concerning audits of publicly owned companies but also in the terms of the contract for the individual engagement. All the work which is required should be done, but that which is anachronistic should be modernized or eliminated.

Publication of the long-awaited report on standards of education and experience for CPAs is bound to lead to a review of the present system of professional accounting examinations in the United States. Since the accounting profession in this country is a direct descendent of the earlier development in Great Britain, a brief description of the system of examination in that country should make a useful contribution at this time. There are seven organizations of professional accountants in Great Britain which conduct their own professional examinations as a pre-requisite for admission to membership. The peculiar feature of the Institutes is their rigid reliance on the apprenticeship system. A candidate for membership must serve for five years as an articled clerk with a member who is called the principal. In the past it was customary for principals to charge a premium for the apprenticeship. The Association of Certified and Corporate Accountants was formed through the merger of a number of smaller accounting groups.

Reviews the book "Oil Accounting," by Robert E. Waller.

This article discusses the teaching of social accounting. In the last ten years, the two fields--accounting and economics have been drawn closer together, because professional accountants and professional economists increasingly utilize the same data in their work. The highly technical literature on depreciation policy and inventory valuation is sufficient to indicate that an unequivocal concept of either business income or national income is scarcely possible under current conditions. In other words, an accountant or an economist frequently must outline his own set of definitions, the over-riding consideration being the usefulness of the definitions, with the long-term aim of achieving greater uniformity. In the development of useful accounting principles, the practitioner has not confined himself to transactions made within business enterprise. Generally speaking, practicing and teaching accountants have not devoted enough effort to the bold experiment of correlating their discipline with that of the many-faceted field of modern economics.

Reviews the book "Introduction to Statistics," by Frederick C. Mills.

Reviews the book "Proceedings: Automatic Data Processing Conference," edited by Robert N. Anthony.

Reviews the books "Credit and Financial Management," and "Credit Manual of Commercial Laws," edited by Henry H. Heimann, W. Randolph Montgomery, William C. Porth and Earnest A. Rovelstad.

The article talks about a proposal for determining the significance of variations from standard. A primary function of cost accounting is to furnish information which can be used as a basis for action by appropriate supervisory personnel in controlling costs. Many managers, consistent with their intimate knowledge of operations, undoubtedly have developed rough gauges by which they measure performance; however, this "judgmental factor" is often not supported by objective evidence. Therefore, what may be an outside limit in the mind of the manager may or may not be justified by the historical facts. The potential uses of statistics in the area of cost control is gaining recognition. It may be that quality control techniques can be drawn upon in reaching a satisfactory solution to the problem under consideration here. The use of statistics will make possible a mathematical and orderly evaluation of the historical data; moreover, statistical quality control permits the division of the total variation of quality characteristics into chance and assignable variation. Cost accounting should be expanded to include interpreting the significance of variations. It may be helpful if objective methods can be developed which will facilitate the selection of those variations which should be explained.

Reviews the book "Electronic Data Processing for Business and Industry," by Richard G. Canning.