Knowledge that Transforms

Reviews the book "Cost Accounting," by Homer St. Clair Pace and Edward J. Koestler.

The article focuses on choice among alternatives in accounting for verbal builders. The verbal builder, chains ideas into idea-models with a relatively free hand, he can choose the units to be included, selecting among alternative ideas the ones he thinks most desirable; his arrangement of units is also of his own choosing his objective is a simple one that of choosing and arranging idea-units in a manner convincing to himself and persuasive to his readers that by his sequence of thought another idea has been given creditable support. The fact of the matter is that there are two ways of thinking of accounting theory. One way is to consider the theory as many explanations, reasons, justifications which will help to understand why accountancy is what it is, and second view of accounting theory is being reflected particularly in some of the items in the literature which suggest in one way or another that economic engineering needs better data for its use than that supplied about enterprise net income by the usual process of accounting. Since accounting cannot offer a universal service to all types of entities, one of the basic premises needed for a theory of accounting seems not to support a conclusion in favor of modifications by application of index numbers.

The author describes the challenges to the accounting profession in this article. He provides an insight to the background of accounting, the necessity of recording the terms of business transactions and the development of accounting techniques. He illustrates the increase in number of public accountants and the development of accounting as a profession with quotations as to the definitions of a profession. Discussing current challenges faced by the accounting profession he divides them into two categories which are the challenges within the profession and those initiated outside the profession. He further divides the outer challenges into two divisions which are, those which arise through technological changes in methods of recording and those which are enforced through the action of some who would take over certain segments. The author describes how more people can be encouraged to adopt the accounting profession and discusses questions related to certified public accountant certificate (CPA) examinations. He also describes the standards of education and experience for CPA candidates, the sphere of activities of a CPA and the formulation of accounting principles and standards of reporting.

Reviews the book "Policy Formulation and Administration," by George Albert Smith and C. Roland Christensen.

The author of this article reviews the thesis that the last-in-first-out (LIFO) method of inventory valuation and an accounting system designed to provide management with internal data for control and decision compliment each other. He elaborates the LIFO theory, illustrating it with quotations. He then enumerates with examples, the data required by a manufacturing enterprise with a heterogeneous inventory under any variant to find its LIFO inventory and cost of goods sold. He considers the problems faced by a first-in-first-out (FIFO) firm while demonstrating that periodic reports derived from a standard cost system compliments LIFO, whereas they conflict with FIFO. He examines the question of whether a firm should price on a FIFO or a current cost basis as prices are subject to frequent changes. He discusses the ability of the purchasing department to buy at the right prices as an important factor of the success of the firm and the conditions under which a firm can be said to be speculating on a commodity.

Reviews the book "Federal Income Taxation of Individuals," by Weston Vernon, Lillian Malley Vernon, and Stuart E. Keebler.

Reviews the book "America's Needs and Resources: A New Survey," by J. Frederic Dewhurst and others.

Considerable attention has been given in recent years to the preparation of candidates for the CPA examination. A recent and comprehensive part of the studies have been made and others are in process, which cover far more cues and hence give results, which may be more significant statistically as to the experience of CPA candidates in general. But it seems worth noting that of 186 persons who have taken one or more sections of the Alabama CPA Review Course, and whose present addresses are known, it is certain that 115 are now CPAs, while the status of forty is unknown. Of the 136 who returned the questionnaire, a total of 105 are CPA's. This is not to imply that those who succeeded did so entirely because of the review course. However, many students have given the course credit for providing that final boost which may often make just the difference that leads to a passing grade. The course is not a panacea guaranteed to get all and sundry through the CPA examination. However, it has proved to be most worthwhile for serious candidates who have already prepared themselves as well as they can through college courses, correspondence courses, or in other ways, and who still need a final lift to help them through.

Reviews the book "Report Writing for Accountants," by Jennie N. Palen.

Reviews the book "Auditing Principles," by Howard F. Stettler.