Knowledge that Transforms

Reviews the book "Records Management and Filing Operations," by Margaret K. Odell and Earl P. Strong.

In the June, 1947, issue of the "Journal of Accountancy," appeared an article entitled "TVA's first audit by General Accounting Office (GAO) points way to businesslike evaluation." The article starts out with an editorial comment stating failure of TVA . . . to provide "yard-sticks" to measure private corporate operation; or, to be capable of being evaluated as going businesses, springs from lack of facts. General Accounting Office has made a commercial-type audit of Tennessee Valley Authority (TVA), plus recommendations, which show how TVA may be made comparable to commercial operation. . . failure to charge property taxes, depreciation, interest, and other expenses makes business men feel that government corporations, like TVA, cannot be considered commercial enterprises. The business man's objection grows out of the belief that government should not set up privileged competition with him, using his own money, and giving this competition the added advantages of freedom from taxes, interest, and other charges.

Reviews the book " Bank Frauds, Their Detection and Presentation," Lester A. Pratt.

In 1943; the American Institute of Accountants appointed a committee on selection of Personnel to investigate procedures for selecting and guiding into public accounting well qualified young people and to develop a program of selection. After preliminary investigation, the Committee secured the cooperation of several specialists in evaluation to serve in an advisory capacity and to handle the technical aspects of the project. The Educational Records Bureau, a non-profit making organization of schools arid colleges, which had many years of experience in handling a test service program, was chosen as the operating agency for the project. From the outset, the Committee took a broad-gage view of both the technical and social aspects of the total problem. They recognized from the outset that the personnel in the profession at any given time was the result of a long process ranging from original recruitment of students through selection at the point of employment, and elimination, retention, and promotion after employment.

Municipal Airports are more and more taking on the characteristics of business enterprises. As business ventures, municipal airports naturally strive to be self-supporting, a condition they can achieve only by meeting their costs and expenses from charges made for their commodities. This development places a new importance on the accounting program of the municipal airport. To achieve a condition of self-support requires, among other things, a complete, accurate knowledge of the financial activities and condition of the airport. Only through the operation of a businesslike accounting program is it possible to obtain this information. The municipal airport, with few exceptions, is classified as a function of the general fund. In this capacity its accounting has developed along lines required in general fund accounting, whose objective is to record what information is necessary for budgetary purposes. This type of accounting is concerned primarily with the cash activities of the various functions of the General Fund in relation to their budgetary requirements.

Reviews the book "Modern Economic Thought," by Allen G. Gruchy.

The author is glad that the presidency of the American Institute of Accountants seems to merit recognition by the American Accounting Association. He is a member of both the organizations. The Institute is the national organization of certified public accountants (CPA), primarily concerned with professional public accounting. The Association, with its academic background, emphasizes instruction and the theoretical phases of accounting. Another purpose is that of uniting the profession, advancing the interests of public accountants and encouraging cordial relations between them, and maintaining high standards both for the institute and for the CPA degree which is the hallmark of fitness to practice. It is the stated purpose of the institute to advance the science of accounting, and to develop and improve accountancy education. Accountability and financial planning and control are parts of service to management. Accountants have demonstrated a considerable degree of devotion to service by voluntary and unrewarded public service.

The article reports on the achievements and progress of the American Accounting Association. One of the impressive accomplishments of the association was the marked increase in membership. The widespread interest of professional practitioners in the work, the aims and objectives, the publications, and the activities of the association in the held of accounting education has been gratifying. Many new teachers at the college level have been added to the membership roles. To all of these new members the association extends a warm and cordial welcome and a standing invitation to participate actively in furthering the purposes which are set forth in our by-laws and statement of purposes. The program of the annual meeting gave a glimpse into still another new undertaking, namely, the development of standards rating in the field of undergraduate and graduate study of accounting. It is hoped that extension of this project may become a continuing activity of the association.

In October, 1946, President Eric L. Kohler with the then President elect Professor Hermann C. Miller, appointed the Committee on Revision of the Statement of Principles of the American Accounting Association. The appointment of a special committee on revision of the Statement of Principles represented a significant departure from past procedures. As the members of the Association well know, efforts in the past to formulate and summarize accounting principles were those of the Executive Committee of the Association. The Committee undertook first to survey opinion which would aid it, first, in deciding whether a new statement of principles was desirable and, second, if deemed desirable by the Committee, in the formulation of such a statement. It was believed a democratic procedure must offer each member of the Association an opportunity to express himself; that each member must feel he had been given an opportunity to state his position and thoughts. The Committee decided the most economical coverage could be obtained through the medium of the accounting review.

The attached statement of the responsibilities of the internal auditor was prepared by the Research Committee and approved by the Board of Directors at its meeting of July 15, 1947. In taking this action the Board was desirous of lending its full support and that of, the institute to the statement. It was not intended, however, that the treatment of the various matters in the statement was considered in any sense to be final or fixed. Rather it was recognized that the principles and concepts relating to internal auditing are evolving constantly. The approval therefore represented essentially an endorsement of what the Board believes to be a fair and considered statement of the responsibilities of the internal auditor at its present stage of development. The statement is therefore subject to such further modification in the future as may appear to be warranted in the light of new conditions and needs and through further development in the professional stature of the internal auditor.