Knowledge that Transforms

ABSTRACT: Starting with the increased role of nonprofit organizations and mounting pressures for accountability, this paper reviews several contemporary approaches used to achieve performance evaluation in nonprofit service organizations. An analysis of the deficiencies of social indicators, PPB systems and cost-benefit analysis leads to prospective cost-analytic solutions focusing upon costs and outcomes of service programs. In developing these solutions, cost-outcome is emphasized as fundamental to building viable cost-effectiveness analyses for service program evaluation and accountability. Conceptual discussions of related outcome issues follow. A detailed mental health example illustrates the application of the combined cost-outcome and cost-effectiveness methodology in assessing nonprofit performance for decision-making purposes.

Reviews the book 'Cost Accounting Concepts for Nonfinancial Executives,' by Joseph Peter Simini.

This article reviews the position of the AICPA on the use of the terms "stock dividend" or "stock split" to describe large stock distributions. An empirical examination of 122 stocks was made to determine whether the prices of the common stocks are affected by the terms used to describe the stock distribution. The test results show no association between terminology and stock prices.

ABSTRACT: This article presents the consensus concept of objectivity and two problems of the concept which never have been addressed adequately: (1) observed objectivity (agreement among different measurers applying the same measurement system) may be spuriously inflated by the consensus inherent on various other combinations of rules and measurers; (2) suggestions for improving objectivity typically focus entirely upon measurement systems and virtually ignore the impact of measurers on objectivity. A framework which enables the investigation of these problems is presented. The suggested framework, a multirule-multimeasurer matrix, is an adaptation of the multitrait-multimethod matrix often used to assess the validity of psychological tests and enables investigation of these problems.

Reviews the book "Foreign Exchange Risk," by Andreas R. Prindl.

Reviews the book 'Auditing: Principles and Practice,' Fifteenth Edition, by F. Clive dePaula and Frank A. Attwood.

Reviews the book "Fundamentals of Management Accounting," by John A. Tracy.

The author argues that the accounting profession should investigate further the possibilities of recording compensation expense at the date of grant differently than under present generally accepted accounting principles. The economics and finance literature provides evidence that option contracts can be valued, although an exact evaluation formula still is not devised. However, the literature is remarkably consistent with respect to the variables to consider and the range of values that are appropriate for a given set of conditions. Although an exact figure probably never can be known for any option, it is reasonable to assume that the value for an option can be approximated with a high degree of confidence. In the case of nonqualified stock options, it would seem that the models provide a good answer to our valuation problems. On the other hand, qualified stock option plans involve more variables, and it appears that additional research is needed to model their restrictive components.

ABSTRACT: A historian's riddle asks, "Do great men make history or does history make great men?" Of course, the riddle is a taunt that defies resolution, and so it should seem to be, but for the fact that men such as Eric Kohler make it difficult to believe anything but the premise that "Great men do make history." Kohler's influence over the teaching and practice of accounting covered a half century until his death in February, 1976, He was the only person to serve two terms as President of the AAA and was editor of the Accounting Review for twelve years. His pioneering efforts in the areas of accounting research, principles development and public sector accounting are near legend. The fifth edition of A Dictionary for Accountants (1975) affords us a legacy for contemporary contemplation just as his personal achievements and integrity provide us all with a model worthy of emulation.

ABSTRACT: Accounting Principles Board Opinion No. 29 provides that an exchange of nonmonetary assets normally should be accounted for as if the exchange involved monetary assets. One exception to this provision is the case in which a productive asset not held for resale is exchanged for a similar productive asset in which case the asset received is recorded at the book value of the asset relinquished. However, an interpretive problem arises if a significant amount of cash is included in such an exchange. This paper describes the problem and suggests a solution.