The accounting profession and accounting education have increasingly become more specialized, and necessarily so. The field is too large and the material too complex for accountants to be true experts in every area. The operations research area is perhaps analogous to the area of federal income taxes. Each accountant must have a certain minimum knowledge about taxes, but people need not know all of intricacies of tax law. The first big problem to be overcome is fear of tackling the area at all. As indicated in the allegory, the two indispensable aids in accomplishing this end are an understanding of college algebra, and an understanding of elementary statistics. To become a real expert in linear programming would require a commitment of time and effort which is probably not justified, but to become thoroughly conversant in it and comfortable about it, is not such a big task, and will provide with a solid springboard for tackling the rest of the quantitative field. It seems that this approach is better than starting out with a survey of the entire operations research/quantitative methods field on a general level.

The CPA's attest function has customarily involved primarily the rendering of opinions on financial statement presentations in reports to investors and creditors. Its principal application has been the expression of opinions on the fairness of the conventional financial statements included in corporate annual reports. The auditor's ability to verify information presented outside the financial statements would appear to be the primary determinant of whether his attest function could be extended to include that information. Verification is essentially a matter of obtaining sufficient evidence to provide a rational basis for judging the reliability of assertions made by others. The ability to obtain sufficient evidence to afford a reasonable basis for an opinion regarding any information, financial statement or otherwise, will vary, of course, depending upon circumstances in a particular examination and the professional competence and judgment of the auditor performing the examination. Some of the non-financial statement information is frequently presented for a period of two years or more. CPAs already render opinions in many cases on data covering two years or more. Before a CPA can render an opinion on a company's basic financial statements, he must determine whether those statements present fairly the company's financial position and results of operations.

Reviews the book "Divisional Performance: Measurement and Control," by David Solomons.

This article focuses on designing consolidated position statements in a tabular format to make the study and teaching of accounting courses easier. By holding some factors constant and varying certain selected conditions-investment cost, percentage of ownership, and time it becomes possible to effectively illustrate some of the primary relationships between the selected conditions and the three special items of goodwill, minority interest, and retained earnings as they are presented in consolidated statements of financial position. The exercise provides twenty-four different sets of conditions. The necessary data can easily be mimeographed on a single page for classroom use in the following manner. The completed table can also be used for the purpose of reviewing the patterns of changes which take place in the position statement amounts as a result of changes in the selected conditions. This tabular approach helps the student recognize some of the primary relationships between investment cost, percentage of ownership, and time, and consolidated goodwill, minority interest, and consolidated retained earnings.

The article focuses on some new approaches to risk. A great deal can be said on the subject of risk and how it might be identified, measured and evaluated. It is not the purpose of this article to distinguish rigorously between different categories or dimensions of risk. Rather the author conceptualizes "risk" as emerging from the fact that some of the information, which is pertinent to a decision, can at best be known only in the form of specified probability distributions. The resulting possibility of deviations from any estimate of the events governed by such probability distributions is then the basic phenomenon, which they shall suppose gives rise to risk. Of course, more than one probability distribution may be applicable and a combination of these distributions may then also require consideration prior to effecting choices between investment alternatives. This kind of phenomenon can supposedly be handled, at least in principle, by suitable theorems or algorithms in probability and statistics. At any rate, given this assumption, one version of a more classical approach would next proceed to reduce each alternative to a single-number basis for comparison. In more sophisticated analyses this might be accomplished via a "utility function" approach.

Budgetary disclosure has typically been considered from the standpoint of its possible immediate adoption in practice. Here a somewhat different course is followed in order to portray budgetary disclosure as a possible guiding concept which can help to illuminate, adjust and unify other proposals that have been advanced for altering or extending customary accounting reports. Continuation of the latter (i.e., the customary forms and bases of financial reporting) is then regarded as essential for the attainment of reliable and meaningful budgetary disclosures. A more comprehensive system of reporting --which an evolution toward budgetary disclosure will supply--can also eliminate supposed conflicts between customary practices and suitably modified versions of such proposals as accounting uses of index number adjustments, current costs, etc. These topics are dealt with and illustrated in early portions of this paper. Other parts of this paper deal with problems requiring attention in budgetary disclosure, including extensions of audit to reporting of budgetary changes as well as managerial explanations of deviations between budgetary projections and subsequent realizations. A program for research is also suggested which will include studies of the effects of different disclosure practices.

The article examines, the price index aspects of the making of general price level adjustments. It is the authors' position that much of the research on price-level measurement for general adjustment purposes has been based on the wrong formulation. The basis for this position is developed in the article, some difficulties arising in the present situation are examined, and an alternative formulation is suggested by the author. There are two basic principles of index number usage in making general adjustments. One, when a time series in historical-dollar units is adjusted by a price index, the adjusted series should be as measuring relative quantity changes, and second, the population of items for which quantity changes are measured is defined by the item coverage and weighting structure of the price index employed in the adjustments, and not by the items. It is sometimes stated that the general indexes all move in a common pattern and accordingly it does not matter which index is used.

Reviews the book "Accounting Series: Programmed Instruction," by Robert J. Lewis and Joseph W. Fedor.

Reviews the book "Management Controls for Professional Firms," by Reginald L. Jones and H. George Trentin.

The conclusions of human behavior studies can not be believed, unless the investigator takes precaution to design his study so that confusion in data interpretation and alternative explanations of the conclusions are minimized. Without such precautions, the investigator's efforts may be largely ineffective. Experimental designs which are practical are usually not perfect. Sources of difficulty in experimental design can be attributed to setting up the hypotheses to be investigated, the sample of individuals tested, the measures to be used in the experiment, and the controls used in administering these measures. Even before the researcher collects his data, his conception of the question which he wishes to answer through the experimental process can significantly determine the result. An important source of difficulty in the design of behavioral experiments is the sampling of subjects. The evaluation of behavioral data requires no more care than the evaluation of any other kind of data obtained as part of the scientific processes, but certainly no less. Consideration must be given to experimental controls.