Abstract Presents the author's comments on the program at the annual meeting of the American Accounting Association to be held at the University of Kentucky, Lexington, Kentucky. Discussion on the changes in the program; Sponsorship of four professorial development seminars; Analysis and recommendations that may want to be considered by the members for use at their respective institutions.
Abstract The article presents information on new concepts on direct costing. Direct cost is defined as the cost of materials used, labor employed and the expenses, which would not have been incurred but for the production of this output. One of the problems of direct costing arises in the handling of costs which are in part fixed and in part variable with volume. These semi-variable costs acquire their dual nature for one or both of two reasons. Cost classifications generally used in accounting are either based upon the object for which the expenditure was made or upon the function performed. For example, indirect labor usually contains the cost of maintaining a minimum organization necessary to keep the plant ready to operate. This cost is essentially fixed. Indirect labor also includes costs beyond this minimum amount which vary with volume. Direct costing's approach to income measurement is to deduct from sales dollars the direct costs of producing the articles sold and the direct selling expense. The result is the marginal contribution toward fixed manufacturing, general selling, and administrative expense. This method immediately reveals the effect of an increase or decrease in sales volume which is not necessarily evident when fixed charges are deferred as inventory costs.
Abstract Management reports have traditionally been considered an internal problem for each individual firm. The basic problem in top management accounting reports revolves around communication. In designing management reports, if the job is to be done right, the accountant must put himself in the position of the operating executive and determine what financial information is desirable and in what form it will be most useable. The members of the Board of Directors, and the operating management of the functional operating divisions that form the operating and financial policies of the business, may not be trained accountants. The usefulness of management reports is dependent in part on the personal taste of the individuals and individual preferences, but it is also dependent in part on the training and working habits of each group of individuals who may, in the past, have influenced the manner and the extent to which management personnel currently uses financial or other management reports. The lines of communication need to be clear and open between operating management and the Board.
Abstract The late 1880's, in the U.S., represented a period of undoubted development and advancement in accountancy both in better knowledge of the profession and its requirements. Another trend that tended to further the development of the profession was the incorporation of industrial concerns under the laws of the various states. The securities of these corporations were issued and offered to the investing public. In many of these corporations, public accounting firms were employed to make examinations and reports on the financial condition and earnings of these corporations before their securities were offered for public subscription. The first industrial firm so incorporated whose securities were offered to the public with an accountant's certificate attached to the prospectus was the firm of John B. Stetson and Co. of Philadelphia, Pennsylvania. By 1909, the accountancy profession had gained such favor among businessmen that corporations of the better class were of their own volition adopting the practice which had become obligatory in England under the Companies Act of 1900, of retaining public accountants to make periodic audits.