Knowledge that Transforms

Reviews the book "Credits and Collections in Theory and Practice," by Theodore Beckman.

Reviews the book "Overhead Expense," by A. Hamilton Church

In building a curriculam for any school, the educational objective of the school and the character and extent of the educational preparation possessed by the entering students, invariably dominates the process. Since graduate schools of business administration have been excluded from consideration, one can say that the mental equipment and training of the average high-school graduate determine the ability of the student of a collegiate school of business. Three courses have been found to be satisfactory instruments for the student in collegiate schools of business. The first is designed to give a mastery of those mathematical principles and methods which must be used in business, finance, and management calculations, if such calculations are to be made effectively. Other courses are, Course In General Mathematics For Business Students and Elementary Business Mathematics and Advanced Mathematics of Business Management, and Planning and Forecasting. For these 60 hour courses, the tools developed in General Mathematics Course are most helpful.

Reviews the book "C.P.A. Review and C.P.A. Answers and Solutions," by Sidney G. Winter.

In February, 1924, Messrs, Touche, Niven, & Co. audited for the fourth successive year books of one Fred Stern & Co. Inc., of New York, a rubber importer and dealer and prepared thirty-two copies of a balance sheet to which the following certificate, dated February 26, 1924, was affixed. According to the balance sheet, the net worth of the company was more than one million dollars. The Ultramares Corp., professedly relying upon the balance sheet, began to loan money to the Stern Company on trust receipts in March, 1924. Actually, the company was insolvent and the balance sheet false, in December of the same year the Stern Company collapsed. The Ultramares Corp. then sued Messrs, Touche, Niven, & Co. and in the appellate division of the New York State Supreme Court (I) secured judgment of $208,058.97 for damages arising out of the negligence of accountants but was unsuccessful in reinstituting a charge of fraud and collusion on the part of accountants' employees with Stern officials, which had been dismissed by the trial court. The case was then carried to the highest court of the state by both plaintiff and defendant. Judge Cardozo in an exceedingly able and trenchant opinion reversed both findings.

Reviews the book "Psychology in Modern Business," by H.W. Hepner.

Many accountants have lack of knowledge of their own profession. Neither they have the desire to gain knowledge. Not only the historical aspects of accountancy are unknown but important matters as laws affecting the profession, societies of accountants, and the ethics absolutely essential to the proper practice of accountancy are unheard of in some cases. The study of history of one's profession, acquaints a student with the mistakes and the achievements of those who preceded him. The study of fact and conditions is important as it gives the student reasoning ability that later will permit him to apply such remedies and measures that are necessary to turn possible failures into successes. Specifically, the accountant who merely has his knowledge of debit and credit, or who knows a chart of accounts and has had training in recording facts in books of account will not succeed unless he knows how to present these facts to his client in such manner as to preclude any misunderstanding.

This article focuses on the editor's views about the significance of corporate's financial statement. The editor says that records of the company both in the books and elsewhere is a curious expression, the last six words of which constitute another questionable pleonasm. In the everyday language of the auditor, the "records" are the books of account, documents and files. The reader of the certificate has the right to expect a term to be all-inclusive if it is not explicitly limited, there would seem to be no need of telling him the obvious. Besides, the auditor, for a portion of his information, goes beyond the records of the company during the course of his examination, if he did not do so, he would undoubtedly be guilty of negligence. Perhaps it was meant that the auditor has made some of his customary verifications "elsewhere" than in the records, but the language used falls short of saying so. Condition of affairs apparently is meant to convey the idea of "balance sheet" and "statement of profit and loss" as it stands it brings to mind "statement of affairs" and is confusing.

Reviews the book "Modern Bookkeeping Practice," by Nathaniel Altholz and Anthony W. Klein.

Reviews the book "A Solution to the Appreciation Problem," by William B. Castenhols.