Knowledge that Transforms

Reviews the book "Accounting Principles and Control," Third Edition by Lawrence L. Vance and Russell A. Tausig.

The article repots on several news briefs related to personnel changes in different universities and colleges of the U.S. In the University of Alabama, Dean and Professor Emeritus Paul Garner served as a Visiting Professor in July at Appalachian State University; and in September and October he was a Visiting Professor at the University of South Africa in Pretoria. In the University of Arizona, Don W. Vickrey joined the faculty Fall, 1973, as Assistant Professor. He was formerly Assistant Professor at Florida State University. In the same University, Edwin A. Bump, Assistant Professor, resigned June 1973 to accept a position as Associate Professor at Eastern Washington University. In the University of Hawaii, Howard D. Lowe returned to campus August 15 after a one-year leave of absence from his duties as Professor of Accounting and Associate Dean of the College. He spent the first half of the year in teaching, study and research at the University of Utah. In the University of Michigan, Donald H. Skadden, from the University of Illinois, is serving this year as Visiting Arthur Young Professor of Accounting.

Comments on a study by Martin L. Gosman on the investigation of companies which have made changes in their accounting policies. Problems with the study; Insights on the data presented in the study; Suggestions for the improvement of the methodology.

This article presents a course outline for a senior level accounting seminar for honor students. There were four separate types of activities in the course. The topics suggested to the students for debate changed so as to incorporate new issues faced by accountants. Students were required to write a short paper on each of the topics before it was discussed. They were encouraged to show some evidence of library research, some originality of thought and correct term-paper format in each report. This requirement resulted in the students being adequately prepared to discuss each of the topics intelligently.

Presents information on a study which described the application of Box-Jenkins methodology to the problem of forecasting financial time series data. Description of the generalized model; Methodology; Results and discussion; Conclusions.

Reviews the book "Audits of Colleges and Universities" by the AICPA COMMITTEE ON COLLEGE AND UNIVERSITY ACCOUNTING.

This article presents comments on Harold Wyman's article "Financial Lease Evaluation Under Conditions of Uncertainty," published in the July 1973 issue of the journal "The Accounting Review." When operating costs and eventual scrap value under the buy/borrow alternative are random variables, with known distributions, Wyman shows how computer simulation can be used to provide both the expected value of the interest costs under each of the two alternatives and the statistical distribution of those costs. Wyman suggests two possible ways to evaluate leases: (1) Calculate the after-tax interest cost equivalent of the lease contract and the internal rate of return or IRR; (2) Calculate the after-tax net present value (NPV) of both the leasing and buy/borrow alternatives and accept the alternative with the higher net present value, provided that the NPV is positive. Even when the two modes of analysis lead to the same decision, the NPV method is easier to compute, and hence cheaper to implement than the IRR method. Under the lease alternative, separating the operating elements from the financing elements requires treating the lease as a form of debt financing. Although this treatment is not yet acceptable for financial accounting purposes, valid economic analysis and decision-making require it.

The article presents the text of the report of the American Accounting Association Committee on management information systems. Computer-based systems are widely used in business, health care, public agencies, and other large organizations for the purpose of accumulating, processing, summarizing, and transmitting information. The technological developments and advancements of the past decade have revolutionized the scope and content of computer-based systems. As the computer-based system increases in size, complexity, and integration, the total operations of the organization become more dependent on the information system. The capital investment and human resources required for making major changes in the system become even more extensive. After a particular information system has been implemented, performance and statistical data can be accumulated concerning various facets of the organization's operations. With this information, improved and revised information systems can be designed which will permit the attainment of even higher levels of efficiency and effectiveness.

This article presents a study on the evaluation of resource acquisition decisions by the partitioning of holding activity in accounting in the U.S. It has been an endeavor in this paper to unfold a performance measurement system that overcomes some of the shortcomings of using holding activity as a performance measurement surrogate that have been cited by previous writers. The presentation has been in the context of a specific inventory optimization model. However, the ideas delineated in the interstitial structure can be adapted to other situations regardless of whether the firm uses optimization decision models or not.

Reviews the book 'Topical Guide to Accounting Readings,' edited by Peter H. Knutson.