Knowledge that Transforms

Reviews the book "Provisions in CPA Laws & Regulations."

Reviews the book "Accounting Information on Business Decisions: A Simulation," by Jack Gray, Kenneth S. Johnston, John J. Willingham and R. Gene Brown.

The article presents problems prepared by the Board of Examiners of the American Institute of Certified Public Accountants (CPA) that were presented as the second half of the CPA examination in accounting practice on May 13, 1965. The first problem is related to the sale of an apartment house the accounting records for which are maintained on the cash basis method. For the quarterly audit, the information available includes that the apartment building and land were purchased for $223,000. The building was being depreciated over a 40-year life by the straight-line method for the purposes of both reporting and income taxes. Accumulated depreciation after three-and-a-half years was $17,500. No depreciation has been recorded on the books after that. The contract of sale stated that the price for the land on which the building was built was $25,000. The purchase money mortgage payments are $1,000 per month plus accrued interest. The students were required to prepare the adjusting journal entries to record the sale on books, and to compute the taxable capital gain that can be expected on the installment sale method.

It is the purpose of this article to propose alternative paths for internal auditors in their quest for professional recognition. Antecedent to making recommendations, the writer briefly examines the key attributes of a profession and prepares an inventory of the plus and minus factors currently associated with the status of internal auditing. This article has been an inquiry into the current status of internal auditing. The writer has concluded that although internal auditors are not fully qualified as professionals they should be able to achieve such stature in the near future if they take certain adequately conceived and timely action. They need (1) to establish a uniform educational process, (2) to formulate and publish a code of professional standards, and (3) to develop a system of examination and accreditation of practitioners. There is a substantial body of preliminary data in these regards that has been developed over the years by individual internal auditors and by the Institute of Internal Auditors and its related chapters. This work needs to be synthesized and expanded as rapidly as possible.

Reviews the book "The Theory of Financial Management," by Ezra Solomon.

Reviews the book "The Individual Income Tax," by Richard Goode.

Reviews the book "Corporate Debt Capacity," by Gordon Donaldson.

The article discusses the distinction between the conventional and some of the suggested methods of reporting fixed assets as they affect business income. This is done by presenting an article by professors R.L. Dickens and J.O. Blackburn published in the April 1964 issue of the journal The Accounting Review. These published accounts aid stockholders and other outsiders to project the future earnings and financial condition of the corporation and to assist with the evaluation of the performance of management. According to the author, as the individual requirements of different users of published accounts are unlikely to be cognate, one set of accounts will scarcely fulfill the needs of all stockholders and other outsiders, no matter how "objectively" the asset values contained therein are determined. He suggests that replacement cost, "realizable value," "historic cost," and "historic cost adjusted for price level changes," can provide a basis upon which stockholders and other interested external parties can project the earnings and financial condition of the enterprise according to their own requirements.

The article proposes accreditation of accounting programs in the U.S. colleges and discusses the strong demand for accounting graduates, with college placement centers reporting generally that demand exceeds the supply. The combination of a continuing high demand for accounting graduates and the minimal cost of providing accounting specialization at the collegiate level have led to a proliferation of programs leading to a degree for which accounting is the major field of study. Any school with minimum offerings in economics and business which would ordinarily include one or more accounting courses, is a prime candidate for the development of a degree based on a major in accounting. Despite the deficiencies of such a "program" in accounting, there tends to be a strong demand for accounting specialization among college students seeking to prepare themselves for careers in business. The diversity and confusion in accounting education today, coupled with the importance of such education at the collegiate level in gaining access to the better accounting jobs, point to the urgency for the development of the accreditation of college and university programs in accounting.

The article presents news related to various appointments, promotions and research work of accounting professionals. Professor S. Paul Garner, dean and current president of the American Association of Collegiate Schools of Business, spent four weeks of the summer attending a series of professional meetings in Europe. Marion Posey of the University of Arkansas has been appointed assistant professor, and professor Robert J. Freeman has joined the staff as lecturer. In the University of Arizona, lecturer Hollis A. Dixon has been promoted to associate professor, and Robert L. Hines to assistant professor. Edward S. Lynn, formerly Director of Education of the American Institute of Certified Public Accountants has joined the faculty at the rank of professor. Lyle H. McIff has been appointed associate professor. Professor Dee L. Kleespie held a faculty fellowship during the summer at Hughes Aircraft Co. In the University of Southern California, David O. Jenkins and James W. Patillo have been promoted to associate professorship rank. John W. Wagner has joined the faculty as associate professor.