This article comments on the proposed model by Myron J. Gordon for the transfer price problem using a socialist economy as the locus of inquiry. The problems posed by a bureaucratic organization, the need for some kind of sanctions, and the essentially subjective considerations underlying all pricing models are correctly identified as major obstacles in the way of a system which attempts to replicate a market economy without the constraints imposed by relative freedom of economic action. A fundamental weakness of Gordon's approach, however is its reliance on the neoclassical theory of the firm as an image from which such an investigation can proceed, and this is coupled with a specification that one of the conditions which the transfer price system must satisfy is that the prices approximate the characteristics of perfectly competitive prices, and have similar consequences for the allocation and utilization of resources. The article concludes that neither Gordon's model of the firm in a socialist economy, nor his postulated condition that prices must approximate to those which would obtain in a perfectly competitive market economy are acceptable approaches to the solution of the transfer price problem. The answer to this problem is urgently required in order that we may extend the boundaries of accounting to comprehend areas of economic activity which are, as yet, relatively unstructured. It will not be found, we suspect, to lie in the application of neoclassical price theory to problems which that theory was never intended to handle.

Presents news briefs related to accounting education as of October 1971. Retirement of E. Bryan Smyth from the University of New South Wales; List of accounting professors who joined the University of Florida; Appointment of Ralph J. Winston as a University Professor of Accounting at the Governors State University in Illinois.

The article presents information related to the department of accounting in various universities in the U.S. In the University of Arizona, Jim G. Ashburne of the University of Texas at Austin is a visiting professor for the Spring Semester 1971. Edwin A. Bump, who completed doctoral work at the University of Missouri, joined the faculty as an assistant professor in September 1970. Taylor W. Foster, who is completing doctoral work at Pennsylvania State University, will join the faculty as an Assistant Professor in September 1971. At the California State College at Fullerton, new faculty for the academic year 1970-71 include Robert W. Vanasse, professor of accounting, previously on the faculty of Ohio State University; Donald J. Barnett and John F. Williams, assistant professors. Robert A. Meier, Chairman, represented the Department at the Faculty Seminar in Palo Alto sponsored by the California Certified Public Accountants Foundation for Education & Research in August 1970. At the DePaul University, Helene Ramanauskas has taken a leave of absence to study quantitative methods at the University of Georgia.

The article estimates the economic effect of varying certain information practices in a specific firm under a specific set of circumstances. The major features of the simulated decision context are a large number of decision variables, over twenty that are centrally determined with a global, but imperfect, optimization model, and implemented by a number of semiautonomous individual decision makers. These individual decision makers, in turn, have access to certain local information and can marginally influence implementation of the centrally determined decision variables. While the production aspects of the linear program model focus on determining the optimum mix to produce a specified number of each main product, the marketing aspects focus on how many of each main product should be produced and sold. Implementation effects may be viewed in terms of resultant variations in the parameters in the central linear program model and in the levels of the decision variables that the individuals are instructed to implement. Such variation may be controllable, and may be desirable.

Reviews the book "Economic Accounting and Development Planning," by Brian Van Arkadie and Charles R. Frank.

Reviews the book "A Mathematical Interpretation of the Balance Sheet," by Giuseppe Palomba.

In a free enterprise system, variations in corporate disclosure practices are likely to result since corporations are managed by groups which have varying managerial philosophies and wide discretion in connection with disclosing information to the investing public. The quality of corporate disclosure influences to a great extent the quality of investment decisions made by investors. This study attempts to identify some of the characteristics of corporations in the U.S. which are associated with, and the probable implications of, the quality of corporate disclosure. Corporate disclosure of information can take several forms and the annual report to stockholders is a very important form of periodical corporate disclosure. This study demonstrates that the corporations which disclose inadequate information are likely to be small in size as measured by total assets, small in size as measured by number of stockholders, free from listing requirements, audited by a small accounting firm, less profitable as measured by rate of return, and less profitable as measured by earnings margin.

Recently in the accounting literature two different directions have been taken toward research into the theory of accounting and information systems. One approach seeks to modify conventional accounting to take advantage of increasing computer capabilities, while the second approach advocates including more diversified types of information in accounting reports. Although different, both attempts reflect the accountant's desire to serve users of accounting data better and in a more efficient manner. Toward this end the objective of this paper has been to develop a new approach to accounting and information systems which both generalizes and unifies these two directions of research. The approach presents a framework within which one can work on both the theoretical issues concerned with extending accounting to provide more types of information and the practical issues surrounding the efficient implementation of an accounting system on modern computer equipment. In order to accomplish our objective, a very general definition of accounting was assumed, one which concentrated on the concepts of "communication" and "economic event . The accounting system could then be constructed around a "data base" which consists of descriptions of economic events, ( K + 1)-tuples of the form (c, x 1 , x 2 , &haelip;x k ) where c denotes a binary event code and x 1 , x 2 , &haelip;x k are values of the characteristic used to describe the event. In this multidimensional system, we are not restricted to a single valuation scheme and efficiencies are gained in storage by using a description space of variable dimension. Also because the data base in any company is likely to become quite complex, a generalized concept of an account was introduced. The method described would permit economic events to be classified, sorted, and sequenced in a variety of ways to handle flexible needs of the users.

In this paper we have devised methods for allocating overhead, charges on the basis of mathematical programming models of the firm's production and sales possibilities. The basic scheme was to charge products on the basis of their utilization of the scarce resources of the firm. The prices for use of these resources were obtained from the dual variables associated with the constraints of profit-maximizing programming models. Special attention was given to traceable and avoidable overhead and overhead subsidies that arise because of sales and production interdependencies or managerial constraints. Our objective, in all of these procedures, has been to devise a method for allocating overhead that does not distort the relative profitability of products so that managers would make identical product related decisions both before and after the overhead allocation. As such, the method captures a principal benefit of direct costing analysis while significantly extending this benefit to recognize scarce resource utilization and interaction with other products in reporting profitability. At the same time, the method avoids a difficulty of direct costing systems in that it is a full costing system with all overhead being allocated to products. Also the availability of the original programming model (before any overhead allocations) facilitates marginal analysis for short term product related decisions and expansion of scarce resources.

The article focuses on a report of the Committee on Establishment of an Accounting Commission. The charge to this committee, as formulated by the American Accounting Association Executive Committee at its August 1970 meeting, is to consider the feasibility and desirability of establishing a Commission to study and recommend an organizational structure for advancing the formulation and modification of generally accepted accounting principles and the issuance of authoritative pronouncements concerning the application of such principles. If the committee recommends that such a Commission should be formed, the committee also should recommend the objectives, method of selecting members, and means of financing the work of the Commission. At the present time, accounting principles are formulated largely by the Accounting Principles Board. Inevitably, therefore, any dissatisfaction with methods of formulating principles is tantamount to dissatisfaction with the Board. High on its agenda for 1971 are other problems which currently obscure the effective disclosure of financial performance, such as the treatment of inter-corporate investments, financial reporting by diversified companies and others.