Knowledge that Transforms

The article focuses on a mixed-sequential estimating procedure with application to audit tests in accounting. One of the purposes in external auditing is to develop a valid opinion on the state of control of a business system. To arrive at such an opinion involves detailed system tests, for example, testing invoices against purchase orders with respect to prices and quantities. Because of time and expense, it is desirable to minimize the extent of these tests, consistent with the quality and standards of assurance desired. In this commonplace audit situation, the use of various statistical sampling techniques has been long advocated. In practice, however, few accountants have found existing sampling techniques to be entirely satisfactory in evaluating the state of system control. The purpose of a pure acceptance sampling technique is essentially to make a decision. As applied to a particular control area, acceptance sampling will yield a "yes" or "no" decision as to whether or not the control area meets a pre-specified level of acceptability. In any particular control area, the auditor, however, is rarely interested in making a yes or no decision on acceptability.

On July 24, 1961, the legislative bodies of the Federal Republic of Germany enacted a new uniform professional code for certified accountants and licensed accountants. This new code came into force on November 1, 1961. In this article the author shall attempt to describe those aspects of the new code which appear to be of some interest to professional accountants outside the Federal Republic and in the U.S. particularly. Under the provisions of the new code, the two professional groups of certified accountants and licensed accountants will continue to exist side by side, but no additional licensed accountants will be appointed, so that ultimately this professional group will disappear. To accelerate this process, the code provides that those who are now licensed accountants shall have the opportunity to join the group of certified accountants merely by taking an oral examination. Licensed accountants are authorized, as before, to certify audits of books and accounts, with the exception of mandatory audits of stock corporations, which have always been reserved to certified accountants.

Reviews the book "Accounting Problems in the Oil and Gas Industry," by W.B. Coutts.

The 1963 annual meeting of the American Accounting Association was held on August 26, 27 and 28 at Stanford University, Stanford, California. Facilities of the University, coupled with the excellent arrangements made the meeting very successful and enjoyable. The program for the Plenary session on Tuesday morning presented discussion on Standards of Accounting Education. At the Wednesday afternoon Plenary session speakers presented topics related to Responsibility Reporting to Management. In addition to the Plenary sessions, a wide variety of topics were discussed, some of which were Undergraduate Accounting Standards, Capital Investment Planning, New Approaches to Accounting Theory, Graduate and Professional Programs, Accounting for the Investment Credit, Management Services and the Certified Public .Accountants Examination. At the Wednesday luncheon and business meeting, President Walter G. Kell reviewed the work of the Committees and other Association activities. Membership Chairman David W. Phipps reported on membership changes and activities. Secretary-Treasurer Paul H. Walgenbach, presented an interim financial report.

The article provides news related to accounting. Fellowships in Community College Administration are available from the Mid-west Community College Leadership Program for the school year 1964-65. Applicants should have the Master's degree and seek a career in Community College Administration. The U.S. Comptroller of the Currency began publication of a new periodical, "The National Banking Review" on September 16, 1963. Glenn A. Welsch and R.K. Mautz were some officers to be elected as Presidents of the American Accounting Association at the association's convention at Stanford in August, 1963. Louis A. Myers, Head of the Accounting Department, is serving as Acting Dean of the College of Business and Public Administration during the first semester of 1964. David L. Stocking, a student in the Certified Public Accountants Review Course, was awarded a gold medal by the Illinois Society of Certified Public Accountants for his grades earned in the November, 1962 CPA examination. He also received an honorable mention from the American Institute of Certified Public Accountants.

Reviews the book "Corporations' Federal Income Tax Compliance Costs," by Kenneth S. Johnston.

In the article, the author who is the President of the American Accounting Association for 1964, projects certain thoughts relative to the expanding role of the Association. The accomplishments of the Association and the many outstanding members over the past 47 years constitute a singularly significant phase of the history of accounting education and of the accounting profession in the U.S. The comparatively rapid increase in total membership and in attendance at the annual convention provides implicit evidence of the continuing impact of the Association. In the coming year, the association's aim will be to serve the membership and to rely heavily on those members who are willing to give of their time and talents on committees and in doing research and writing that contribute to its primary objectives of enhancing accounting education and building the accounting profession. With respect to research the association is in a favorable position to initiate, sponsor and conduct research both in accounting theory and in accounting education.

The article focuses on the suggested solutions to the accounting principle dilemma. The basic was clearly recognized in the 1958 report to the American Institute of Certified Public Accountants Council by the Special Committee on Research Program. Failure to establish the objective thwarted real progress in solving problems and it has disclosed not only how grossly inadequate accounting principles are but also how little logical support there is for them when justification or defense is attempted. As a practicing accountant, the author thought it self-evident that accountants examining reports of corporations must avoid developing vested interests in accepted procedures; otherwise, they would lose their objectivity and fails to see erroneous results that flowed from these procedures. There are people today who say it is regrettable that the accounting profession has such sharply divided opinions on accounting principles. But there will always be differences of opinion. It is that accountants as a profession, have failed to act decisively in establishing a method for considering and then resolving these differences.

The article focuses on college entrance tests and accounting grades. A case for standardized college entrance test is discussed. Some years ago as manager of an office, the author was much troubled by female employee turnover. The personnel manager and the author concluded that aptitude-interest testing would be the answer to the problem and accordingly adopted a battery of tests for prospective employees. In looking over the test results for a group of applicants, one girl seemed to be outstanding. The girl's interest test rated high; she appeared to be emotionally stable; her aptitude test was good; she was intelligent enough, but not too intelligent. Admittedly standardized tests have become increasingly popular, in spite of the lack of conclusive validation data and unlimited criticism. It is said that the trend of the use of tests is an argument for educators. The opinion has been expressed that educators would not have accepted them unless they had proven themselves, which proves that many educators don't know educators. In the accounting field there are interest, aptitude and progress tests published and evaluated by the American Institute of Accountants.

Any one who has been closely associated with accounting employment during the past two or more decades readily senses that the internship as a basic program has lost vitality. One of the reasons given for this loss of interest is the demand for accounting-trained graduates has created a situation whereby undergraduate students no longer need the contact provided by the internship to secure a permanent position. Many of the students are married and thus find it inconvenient to shift families from classroom to field and back to classroom. Many universities are on the semester plan which may not be conducive to an internship program. Many accounting firms for reasons best known to themselves are less responsive to accepting undergraduate students for organized internship programs today than in earlier years. Visual educational techniques and other improvements in teaching methods and materials may tend to reduce the necessity for field experience. On the assumption therefore, that the accounting internship is not dead or even moribund, this article tries to bring it up to date and implement it definite working rules.