Accounting History, Algorist, Abacist, Bookkeeping

Abstract Auditing undoubtedly appeared shortly after man began to record governmental and commercial transactions for you have evidence that even the earliest records were audited. The first attempts to reduce transactions to some medium more permanent than memory probably took a semi-mechanical form. Man probably began a more formal recording of transactions in the dim past when trade between tribes increased. At first, pictures of the objects traded may have been used but by 5,000 B.C. symbols, mutually intelligible to tribes of diverse languages, had been developed. An early Mesopotamian civilization, the Sumerian, recorded commercial transactions on stone dating back to 3,600 B.C. and on day tablets beginning about 3,200 B.C. It is here that the auditor first gives concrete evidence of his existence and that you find the first examples of internal control. In ancient Egypt in the Pharaoh's central finance department, the "house of silver of the treasury," internal control and auditing were In use. Scribes prepared records of receipts and disbursements of silver, corn and other commodities. One recorded on papyrus the amount brought to the warehouse and another checked the emptying of the containers on the roof as It was poured into the storage building.

Abstract Reviews three books. "Accounting: Its Principles and Problems," by Henry Rand Hatfield; "Twenty-Five Years of Accounting Responsibility: 1911-1936," by George Oliver May; "Financial Accounting: A Distillation of Experience," by George Oliver May.

Abstract Reviews the book "Accounting: Concepts, Systems, Applications," by A.S. Carrington and G.B. Battersby.

Abstract A survey of doctoral programs with accounting majors or concentrations has been completed with the cooperation of all colleges of business administration which are members of the American Association of Collegiate Schools of Business (AACSB). Originally intended as a part of the work of the American Accounting Associations 1964 Committee on Courses and Curriculum-Doctoral Programs, the results of the survey were not included in their report because the members of the committee favored a dynamic approach dealing with the direction doctoral programs should take in the future. The survey, largely concerned with the present status of doctoral programs, may be labeled by some as a "nose counting" effort. Many of the participating colleges, however, expressed a desire to learn the results of the survey and this article will attempt to summarize the information so kindly supplied by representatives of all 113 colleges. Of the 113 AACSB colleges, 34 percent offer a doctoral program with a major or concentration in accounting as of the 1963-64 scholastic year.

Abstract 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.

Abstract This article focuses on the funds statement as an analysis tool. Basically the funds statement presents the story of what happened to the funds provided by net income. For a small business an analysis of net income disposition is often helpful to prove to the owner that the profit on which the income tax is computed has actually been earned. To the small business man it is best, perhaps, to make this profit disposition explanation in terms of cash. In the case of a large corporation, however, the balance sheet contains many varied current assets and current liabilities. The funds statement discloses in a single figure the year's net increase or decrease in liquidity position. By further analysis this change can be appraised and related to other items of the statement. The amount declared as dividends, preferred and common, is clearly set forth in the funds statement. More important than the absolute amount of such dividends, however, is their relative significance. In the fund-change statement, as in no other accounting report, there is presented the story of depreciation and its real significance to the business.

Reviews the book "Working With the Revenue Code--1957," edited by James J. Mahon.

Abstract An efficient intracompany pricing system should establish a price that: 1. Fosters a healthy interdepartmental competitive spirit. 2. Provides an adequate profit yard-stick for the measurement of departmental management. 3. Provides figures to top management for use in policy decisions to make or to subcontract. 4. In some cases minimizes federal income taxes. The four methods available are: (a) Price established by top management. (b) Cost, cost plus fixed percentage, and standard cost methods. (c) The retail price offered to the producing division's other customers. (d) Interdepartmental bargained price method. Ideally the standard cost method would appear to afford the best answer to the four basic requirements. Certainly a company already using standard costs would find little in the other available methods to warrant their use. In the absence of an adequate standard cost system, the bar-gained price method has much to recommend it particularly if a list price with class discounts is used to offset long and tedious negotiations.

Abstract Reviews the book "The Impact of Regulations Upon Accounting Theory," edited by Barbara D. Merino.