Abstract Recent developments in auditing receive considerable attention from accountants. The literature and other information available, which relates to auditing in the U.S. up to about the beginning of the twentieth century, seem to indicate that auditing was then completing its first major phase of development. It is generally recognized that auditing in Great Britain had been instituted to a great extent by specific statutory requirements. The principal function of an audit was considered to be an examination of the report of stewardship of corporation directors and the most important duty of the auditor was to detect fraud. Although the adoption of sampling procedures probably represented the most important development in auditing, other changes were beginning to appear, as indicated in the preceding references. This development also seems to represent no departure from the point of view of the detailed auditors, for it seems to represent originally a substitute for the enormous quantity of detailed audit work formerly done in audits.

Abstract There is a present need to devise and establish by authoritative recommendations of the profession a set of accounting concepts and standards, which will be generally accepted and adhered to in the determination of corporate net incomes, so that the findings of the accountant as expressed in the annual reports of American corporations with regard to the amount of the income accrued or loss sustained during the fiscal period, will be accepted and relied on by the public and all interested parties as definitive and conclusive and expressing substantially the facts and the result of the events which took place during the period. In the opinion of many accountants such a codification of standards for income calculations would be an important step forward toward allaying the suspicion and lack of faith in the income determinations presented in corporate financial reports. The great usefulness and social utility of such a development in the accounting profession can hardly be questioned, because if it can be achieved it will help to lay the factual foundation for impartial social control if national economy. It is true that in the determination of corporate income for any period of time opinions and estimates play an important part in greater or less degree, depending on the kind of business and the nature of assets.

Abstract The impression may have been gained that the author feels there are very distinct limits within which small business can be assisted. This is a correct impression. For the majority of small firms there is little that can be done in the way of aid. They provide uneconomic substitutes for jobs which have not been provided elsewhere in American system and the primary solution to the problem is not to be found in perpetuating this state of inefficiency. The continuance of the American economic system is much more dependent on finding an effective way to employ this manpower and these resources than in attempting to continue people in a state of "free" but marginal uncertainty. Most persons are not good entrepreneurs even for a small firm. Certainly there are many fewer good businessmen than the numbers of those who are attempting to be entrepreneurs. Small business is concentrated in the service trades and retailing, fields in which a small amount of capital is required and which involve types of operation that do not compete with the greater efficiency of the mass production industries.

Abstract The Standards Rating Committee was appointed in 1949 for a period of five years upon authorization of The Executive Committee, meeting in Columbus, Ohio in May 1948. This committee continued the work of similar committees appointed and serving during the calendar years 1947 and 1948. A portion of the program of study by the committee has now been tentatively completed. This report is therefore submitted with the hope that it will be given full publicity to the members of this Association and generally to all interested persons. The primary objectives of the Committee were agreed upon at the first meeting. These objectives may be suggested by the needs expressed in the following statements adopted unanimously by the Committee. The Committee has therefore attempted to bring out a suggested program of acceptable standards. It is important that proposals herein be accepted generally and put into effect as quickly as feasible in the framework of educational institutional procedure or that objections, criticisms and suggestions be made for the purpose of restatement and revision.

Abstract The justification for the adoption of standard cost should include the point that a proper or objective cost, however defined, can exist independent of subjective or incurred cost, at least temporarily. Standard cost for control purposes usually takes into account, or at least rationalizes, all expected expenditures and charges related to the manufacturing process. If competent factory engineers and superintendents are given a free hand in designing a factory for a stated rate of output of a product, there will be one combination of production factors which will be the most economical combination. Any deviation from this combination will yield a higher unit cost of output. Presumably the word objective can be used to describe such a unit cost. The isolation of this non-essential element from manufacturing cost, as ordinarily arrived at, might not be a difficult matter under all circumstances. If production is fairly standardized, it is likely that the rate of production is increased by exactly duplicating previously acquired combinations of factors of production, assuming stable conditions, and that it is decreased by ignoring similar combinations of factors of production.

Abstract This article focuses on an investigative report on a specialized course in accountant's writing which was offered last year at Northwestern University. The questionnaire which is the core of this report was sent to 62 representative accounting firms located in all parts of the United States. Although the scope of the survey may seem to be limited by the small number of firms involved, a quick glance at their names would show that many of them are national firms with branch offices throughout the country. It is believed, therefore, that the replies are representative and that findings are based upon the thinking of the profession. Emerging from the replies to the questionnaire and from our experience in teaching the trial course, a distinct pattern for a specialized course in writing for accounting majors has been found out. Such a course must be designed to teach the student to do the following things: first, analyze accounting material and formulate ideas based on dear thinking and accurate objectives. Second, set up these thought patterns in simple, precise, concise, reader-adapted prose.

Reviews the book "Wills, Executors, and Trustees," by William J.Grange, Walter R.Staub and Eugene G.Blackford.

Abstract Many of the experienced teachers, as well as some of the new ones, have developed devices and techniques for the presentation of certain knotty aspects of accounting. This article presents suggestions that might well be made available to other members of the teaching profession through publication in the magazine "Accounting Review." This article presents a method of elementary presentation of volume, cost and profit relationships. The material that follows is designed to be used in the classroom as a simple but highly effective method of explaining and illustrating (a) the concept of unit costs, and practical managerial uses of unit costs (b) the mild enigma that a reduction of unit sales price can result on occasion in an increase of aggregate net profits, and(c) the concepts of marginal costs, break-even point, and optimum profits. A class period of one hour is usually sufficient for presentation and discussion of the subject. The material should be presented in a sequence of steps.

Abstract The article focuses on recommendations presented by the American Accounting Association's Committee on Concepts and Standards, regarding the use of term "reserve" in accounting. The committee recommended that the term reserve should not be employed in published financial statements of business corporations, appropriations of retained income should not be made or displayed in such a manner as to create misleading inferences, and the reserve section in corporate balance sheets should be eliminated and its elements exhibited as deduction-from-asset, or liability, or retained income amounts. In general usage, outside of accounting, a reserve is a fund of cash or other assets. In accounting the term has been used to caption a variety of balance sheet items including segregated retained income, segregated asset, asset valuation and asset amortization amounts, and liabilities. It has been recommended that the word reserve be restricted to captions describing appropriated retained income. The committee believes that the popular understanding of financial statements, and the thinking of the profession, would be promoted by abandoning the term.