Abstract It is the purpose of this article to propose alternative paths for internal auditors in their quest for professional recognition. Antecedent to making recommendations, the writer briefly examines the key attributes of a profession and prepares an inventory of the plus and minus factors currently associated with the status of internal auditing. This article has been an inquiry into the current status of internal auditing. The writer has concluded that although internal auditors are not fully qualified as professionals they should be able to achieve such stature in the near future if they take certain adequately conceived and timely action. They need (1) to establish a uniform educational process, (2) to formulate and publish a code of professional standards, and (3) to develop a system of examination and accreditation of practitioners. There is a substantial body of preliminary data in these regards that has been developed over the years by individual internal auditors and by the Institute of Internal Auditors and its related chapters. This work needs to be synthesized and expanded as rapidly as possible.

Abstract A considerable controversy has arisen during the past decade concerning the task of defining and codifying generally accepted principles of accounting. The efforts of the American Institute of Certified Public Accountants to narrow differences in the definition and application of accounting principles have become increasingly pronounced since the formation of the U.S. Accounting Principles Board in 1958. In 1963 the Board began a special research study to define accounting principles that might be said to enjoy current general acceptance. It is time that an integrated effort to develop accounting principles for and by the areas, which desperately need them, was accomplished. If the quest for these principles is to be satisfactorily consummated, it requires the abandonment of the artificial barriers to a combined effort. The accounting profession, regulatory authorities, specialized enterprises, investors, and American business all want and need a codification of accounting principles and reporting standards. It would appear reasonable that a task force comprised of these factions could command the unification of effort and of funds with which to get the job done.

Abstract The article discusses the concept of declining-balance depreciation. The article consists of three formulas which can be useful where computations as to periodic or accumulated depreciation under a declining-balance method are required. Just as a premature disclosure of the guilty party of a good mystery can spoil the plot, so can the disclosure of the derivation of a formula spoil the fun for those interested in such. The calculation of periodic declining-balance depreciation is provided by a formula. For purposes of illustration, the author assumes that an asset costing $10,000 has an estimated life of twenty years, or a ten percent rate for double-declining balance depreciation. Accumulated depreciation at the beginning of the nth year is computed by the formula, when declining-balance depreciation is used. The article presents a table which indicates the undepreciated balance of the asset at the end of the period. Where a large number of unit accounts are maintained and tests are to be made of the computations of depreciation, similar tables with appropriate values can be constructed to facilitate such test checks.

Abstract As well known, the practitioner must operate within his own frame of reference that is, he can give recognition only to those economic changes which affect financial position and results of operations as determined by generally accepted accounting principles. Thus, he cannot stray far beyond the concepts that are presently understood and accepted by the business community or those that he believes could become acceptable. This does not mean that he cannot look forward to the day when the balance sheet and income statement will present financial position and results of operations in an absolute or economic sense. He must realize, however, that the latter is a different frame of reference, which is far from attainment. The report on the realization concept and the supplementary statements also appear to stress an objective of recognizing holding gains and losses resulting from increments and decrements in the value of assets as they occur, rather than postponing their recognition and inclusion in the measurement of income only at the time the asset is disposed of.

Abstract The article attempts to clarify the distinction between monetary and non-monetary items by focusing on the monetary definitions used in the Accounting Research Study No. 6, which classifies prepayments or deferred charges as monetary items because they are advance payments on liabilities which will accrue as time passes or as services are rendered. Monetary assets represent cash and fixed-money claims that are, relatively speaking, uncommitted funds. The service potential derived from monetary assets pertains to funds that are potentially available to acquire real assets. In contrast to cash and fixed-money claims, nonmonetary or real assets are measured by a past commitment of funds. The distinction means that deferred charges and credits should be excluded from the calculation of the real gain or loss on the net monetary position. Instead, the deferred charges and credits are classified as real assets, and should be adjusted by the use of a general price-level index into current dollars. In this manner homogeneous revenues and expenses are matched in terms of equivalent dollars.

Abstract The article focuses on the use of computers to show the students how accounting provides the data for a total management information and decision-making system, as well as how it reduces the purely clerical routine formerly associated with accounting. In 1964 American Accounting Association Committee on Courses and Curricula--EDP reported that under graduate accounting students need a three-fold exposure to electronic data processing, concurrent with or prior to the introductory accounting course-basic programming instruction, as an approach to problem-solving in a variety of accounting courses, and as an integral part of the accounting systems course. There are several advantages to be gained from integrating computer programming into the elementary accounting course. These advantages are significant enough to warrant integration at the expense of two or three conventional written assignments, or even in lieu of a chapter or more of certain traditional first-year material. Among the several areas of elementary accounting instruction that are adaptable to computer application, none is more apparent than payroll accounting.

Abstract Although cost accounting became fully absorbed into the formal accounts, it has nevertheless retained over the years something of its original and esoteric nature. Data incorporated into the cost accounts receive a transforming action sometimes not clearly encompassed in guidelines set forth for the practice of financial accounting. Thus, there arises a dilemma of both description and theory formulation. Cost accounting, when well developed, represents a highly specialized segment of the accounts. At the same time, however, its data become an important aspect of many problems facing the general accountant. Broadly speaking, what apparently is needed in accounting theory formulation is a study leading to a comprehensive and unified statement concerning accounting theory as a whole. Such a statement should integrate a presentation of purposes, a coherent general theory rationale, and guiding standards, which would apply to the broad outlines of the accounts. Theory expressions made in this statement must be capable of extension to all accounting processes. Finally, as regards the subject of this article, steps need to be taken to extend accounting theory formulation to specific problems encountered in the area of cost accounting.

Abstract Experts have long debated the theoretical problem of defining business income and the much greater difficulties of translating any definition into an operationally feasible system of accounts. That is to say, a set of accounts that will consistently and unambiguously reveal what has occurred to net worth during a series of selected time periods. As it is, the same data can be organized according to "generally accepted accounting principles" and be made to show radically different net profits available for stockholders. Many factors are contributing to the confusion, including a variety of acceptable methods for spreading period charges. For example, the ways in which inventory or fixed assets are handled can have a significant impact upon reported profits. These profits in their turn play a key role in influencing a wide range of important private and public policy decisions. In 1954 the government permitted firms to elect accelerated depreciation, for new fixed assets as an alternative to the straight-line method.