Reviews the book "The Financial Executive, the Common Market, and Taxes," by John McCullough.

When products are transferred among the corporate units of a family of corporations, a "sales" price must be established to properly ac- count for the transfer. The intracompany transfer price may or may not contain an element of profit to the selling unit. The decision to use one basic type of system, i.e. containing an element of profit or not, has, therefore, a definite effect upon the amount of net income and consequently upon the amount of tax paid by a family of corporations. The fact that by intracompany pricing a corporation may transfer net income from one unit to another assumes importance because of the structure of the United States corporate net profits tax. The application of this section is limited to transfers of property from a corporation to a newly created or reactivated corporation under common control. The purpose of this section of the code is to prevent the arbitrary shifting of net income among taxable units of a family of corporations in order to prevent the evasion of tax liability. The requirement that transfer price be the equivalent of fair market value could be difficult. If strictly applied by the Director of Internal Revenue and if upheld by the courts, this requirement could, for tax Purposes, restrict intracompany pricing to one method-market.

Reviews the book "Executorship Accounts," by E. Bryan Smyth.

Reviews the book "Industrial Organization," by Joe S. Bain.

The article focuses on the concept of profit planning. Business profits can ye planned with a reasonable degree of success. The objective of profit plan is to maximize the long run financial health of the enterprise. Profit planning implies the predetermination of objectives and the preparation of plans to meet those objectives. Budgeting often involves only a representation of what the results will be if present plans and policies are carried out in the forecasted economic climate. Profit planning, like budgeting, extends to all phases of producing, selling, and financing activity for the coming period and it anticipates needs beyond operations for the coming period through means of the capital expenditures plan. A very popular means for expressing the financial objectives of profit-seeking businesses is the return on investment. Profit planning involves setting long range corporate objective, and determining means of achieving them. A very popular means for expressing the financial objectives of profit-seeking businesses is the return on investment.

The article focuses on current challenges to accounting principles. These accounting problems are raised by build-sale-leaseback agreements, various forms of accelerated depreciation and last-in, first-out method. The author explores the development of these techniques and their development to present generally accepted principles of accounting. Over the years there is a trend towards long-term leasing of property as opposed to direct ownership. The motivating factors in many of these leasing arrangements, particularly in the case of build-sale-leaseback contracts, have been to permit the corporation to free its capital from fixed asset investment and to permit its use in operational areas in which the company is more experienced or to channel it into further capital expansion cycles of a like nature. It is doubtful whether these are the primary factors in lease financing. A more direct factor in many instances appears to be the securing of a higher charge against operations than is possible through annual depreciation charges based upon historical cost.

The article discusses professional accountancy in South America. In Argentina, at the present time, the profession is regulated by an act passed in March, 1945, by which those possessing a university diploma are entered in an Accountants' Register. Non-graduates also can be entered in this register, if they submitted an application in 1945 and were active as independent accountants before December 31, 1944. An accountant can serve in a public capacity only if his name was mentioned in the register. In Brazil, to follow the accounting profession, it is necessary to obtain a diploma from a recognized college, subject to inspection by the Ministry of Education. This diploma must then be registered at the Superintendence of Commercial Teaching and at the appropriate regional council of accountancy. In Chile, accountancy is in its initial stages as a profession. British Chartered Accountants established offices in Valparaiso as early as 1912, and branches have been set up in Santiago, Concepción, and other cities.

The article focuses on the organization of an accounting program in the U.S. According to the author, the accountant of the future, because of his specialty in quantitative controls, will be expected to have a more thorough grounding in numerical analysis, mathematical statistics, and courses involving operations-research, than perhaps any of the other specialties in the management group. He must have an educational background which is as broad as the background of prospective manager. Any steps which have the effect of pulling accounting education away from the business framework in which it has its origin, are steps in the wrong direction. the "ideal" educational program for professional accountants, would consist of an undergraduate program in the liberal arts, a two-year program in business, followed by whatever professional accounting work might be considered appropriate for the university to offer. Additional work in accounting at the professional level is a long-run problem which should be the joint responsibility of university accounting faculties and professional development programs.

The purpose of the article is to compare the use of management accounting techniques in Australia with their use in the U.S. and Canada. It has been suggested that Australian industry uses management accounting techniques to a lesser extent than American industry. Two research projects conducted recently throw light on these opinions. The first examined the management planning and control practices of a selected group of 424 American and Canadian companies. The second project, commenced in 1957, examined financial organization and control practices in a selected group of 157 Australian companies. The two surveys seem to support the belief, however, that through the joint efforts of professional management and accounting associations over the last ten years, the knowledge and use of management accounting techniques have been increased. But there is still a need for a wider and more effective application of management accounting techniques. If management accounting in Australia is to make its full contribution to increasing the nation's productivity, it may be concluded that educational and professional exchanges with the U.S. and Canada should continue in the future as they have in the past.

To relate cost and sales we must value inventory changes at marginal cost. The accounting equation, using this concept, is based on two estimates: (a) volume of inventory at successive points of time (b) marginal cost of the physical inventory change. Errors in these two estimates are relatively more important as the period is shortened. We can eliminate the necessity of making these estimates by introducing purchases and production into the regression calculations as independent variables. For certain purposes it is desirable to convert the equation into a function expressing cost as dependent on sales (or any one of the independent variables). This requires coefficients of physical relationship among the independent variables, purchases, production, and sales. These coefficients may be estimated directly, from long term averages, or from first differences derived from data on input-output quantities in successive periods.