Knowledge that Transforms

Reviews the book "The Management of Corporate Capital," edited by Ezra Solomon.

The further a man goes in accounting, whether public or private, the more his technical knowledge as an accountant merges into and, at times, become an almost indistinguishable part of his knowledge and ability as a businessman or a businessman's consultant. But the qualified professional today can not be merely a technician. He must also be an educated man in the true sense of the word. The formal accounting education courses, i.e. a curriculum at the college level leading to a bachelor's degree with a major in accounting, are intended to qualify the graduate for entrance into the beginning levels of his profession as an accountant. The author opines that formal education in accounting should not be regarded as an end in itself but rather as a quicker and more efficient means of acquiring necessary knowledge. He references the Ford and Carnegie reports and attempts to answer--How great a cost in terms of time and effort can a young man afford to spend in formal education and how much should be left to be obtained through self-education and experience? He also attempts to explore the parts of the desired level of general and technical education that can best and most efficiently be handled formally and the parts, that are more efficiently left to self-education or to experience and on-the-job training?

Reviews the book "Preparing for the CPA Examination," by Robert J. Smith.

The article presents information on examinations in auditing with special reference to one of the problems that was included in the question paper. The auditing section of the May 1961 Uniform C.P.A. Examination was given on May 18, 1961. It is assumed that the amounts involved at the western outlet are material if these items were not material there would be no necessity for any audit work. The principal auditor should be willing to accept full responsibility for the work of another auditor under the following conditions: the other auditor is selected by the principal auditor after appropriate inquiry and investigation. The other auditor is a correspondent firm previously used with satisfactory results by the principle auditor. If the client acted on his own initiative to retain the other auditor, the principle auditor may not wish to accept responsibility for that phase of the work and should disclose in the audit report the use of other independent accountants for examination of the western outlet.

This article focuses on some historical notes on executorship reporting. For almost eight centuries before 1857 the distribution of real property of a decedent had been under the jurisdiction of civil courts. The decedent's wishes as to the disposition of his real property were expressed in a document called a "will." Executors in England during most of the eight-century period under discussion seem, in general, to have prepared their accounts in narrative form. Two fifteenth century executors' statements are particularly interesting as examples of the evolution of reporting technique. The first, that of the estate of Bishop Skirlaw, who died in 1406, presents the inventory and report in narrative form with no clear separation between the two documents. No money columns are used, nor is there much grouping of like items, although the late bishop had been immensely wealthy and left a long will full of detailed directions as to the duties of the executors. Accounting histories say that double entry bookkeeping was introduced into England in the sixteenth century and the preparation of statements from ledger accounts was introduced in the seventeenth century.

This article presents financial report of American Accounting Association for the year ended December 31, 1960. The income includes member's dues, associate members' dues, subscription to the "The Accounting Review," advertising, interest, sales of membership lists and sales of other publications. Expense includes printing and mailing expense, officers, travel, meetings, and administrative expense, committee expenses, salaries and others. The article also includes Statement of Income, Life Fund for the year ended December 31, 1960.

Reviews the book "Accounting for Management Control," by William H.Childs.

This article presents news clippings related to American Accounting Association. It says that among the topics discussed at the regular year-end joint meeting of the 1960 and 1961 Executive Committees were the regulation and supervision of regional groups, committee reports, committee organization for 1961, and the 1961 budget. After considerable discussion, a resolution was passed providing for a more orderly procedure in the establishment of groups and in coordination of their activities with those of the Association itself. Among the specific problems considered in the resolution is that of dividing the country into regions reserved for specific groups so there will be neither intentional nor unintentional competition among the groups, the selection of committee representatives to correlate such appointments with those of other Association commit- tees, and the review of programs for regional meetings to avoid duplication of the program at the annual meeting of the Association. The Eighth International Congress of Accountants is to be held in New York September 23-27, 1962.

In recent years, discussion of the measurement of income has been largely colored and dominated by problems created by changes in the value of money. Serious as these problems are, they are really secondary ones, for they pre-suppose some basic agreement about the nature and measurement of income during a period of stable prices. Between accountants and economists, it need hardly be said, no such agreement exists. Command over capital resources would seem to be a much fairer guide to the subject's ability to pay taxes, and also to the demand made by the individual on various governmental services such as defense and law and order at the beginning. There is no doubt that when, as individual salary-earners and investors, we think of our personal income for a year, we commonly do not tiunk of it in this way, but rather as a stream of prorated receipts, unaffected by any changes in the value of the tangible assets with which we started the year and certainly as having nothing to do with any change in our future prospects-in our goodwill, in other words-which may take place during the year.

This article focuses on some of the problems facing the accounting society and suggests what the profession of accounting can do toward their future solutions. The problems are summarized as--To induce, rather than to force, business management and union labor to reach collective bargaining agreements, to save out of the flow of consumer purchasing power and corporate earnings, enough to equip with adequate tools and other capital assets, to achieve a more adequate understanding on the part of many more persons of the nature and workings of monetary system in its relationship to international and domestic commodity prices, wage rates, volume of business, volume of savings and levels of interest rates. To make progress towards something, that is a paradox and may turn out to be an impossibility. According to the author, accountants can and must play a leading role in disseminating the necessary information and knowledge and the extent to which Accountancy contributes to the necessary solution of these problems will determine the brilliance of its future.