Journal Article On the Interpretation of Professor Leontief's System Get access L. R. Klein L. R. Klein Michigan Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 20, Issue 2, 1952, Pages 131–136, https://doi.org/10.2307/2295846 Published: 01 January 1952

Journal Article Price Effects and the Foreign Trade Multipliers Get access G. L. Rees G. L. Rees Swansea Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 20, Issue 3, 1952, Pages 228–231, https://doi.org/10.2307/2295893 Published: 01 January 1952

Journal Article Mr. Gottlieb on Marx: A Comment Get access Ronald L. Meek Ronald L. Meek Glasgow Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 20, Issue 1, 1952, Pages 78–83, https://doi.org/10.2307/2296164 Published: 01 January 1952

This paper may be regarded, according to the author, as an informal interim report by the chairman of the American Accounting Association's committee on social accounting, or as some prefer to call it, national income accounting or national economic accounting. During its first year the committee has been able to reach a wholly united opinion on what its name or its program should be, but it did welcome as one the action by the executive committee that it be established as a permanent committee. Whatever its future field of interest, the committee has been convinced that, to start with, a period of self-education was essential to a rational consideration of the problems that have beset economists and others who have lately specialized in this field. Fascinating techniques suggesting themselves in the course of evolving national-income components and data-building processes generally, together with deep concern over inescapable imperfections in both available material and existing methods of compilation, have served effectually to preoccupy researchers and block consideration of the interpretations put by others on their final product.

Two needed virtues of any accounting report are simplicity and accuracy. Simplicity is essential in a report to convey to the reader the meaning with the least possible inference or interpolation from his own predetermined notions on the matter involved. The break-even chart is just such a summary report. Its simplicity enhances its ability to communicate the relation of sales less variable and fixed costs at different levels of operation quite forcefully to financial analysts outside the company and to the management group within the company. In such a function its use to convey the information in the master budget is undisputed. In plotting sales as a function of volume on a break-even chart it is assumed that sales equals production which, obviously, is not entirely true because of the accumulation or depletion of inventories. Inventories, though, are usually very small in comparison to total production and, for practical purposes, are ignored in computing sales at various levels of production. Since the break-even chart is based on accounting data and is used as an accounting report, it customarily ignores the cost of the investment used to obtain the production and distribution of a company's output.

It is a commonplace of modem industrial living that accounting methodology may be applied to the economic aspects of any group of transactions which are important enough to be evaluated, classified, and summarized as the basis for guidance of some person or persons. While it is true that the economic aspects of living are not the only important phase of human effort and activity they are, nevertheless, present in practically all activities involving the provisions of goods and services, Hence, accounting technique is not something completely separate from the facts of every day existence. Broadly conceived, every entry made according to accounting methodology is the result of a human judgment based, primarily, on an attempt to arrange a heterogeneous mass of economic data item by item according to a logically consistent scheme. This judgment in the first instance centers around an administrative determination of whether a transaction or transactions should be undertaken and in the second instance on a refitting of the money facts regarding the transactions into the accounting pattern of the business entity concerned.

The suggestion is frequently made that only by experiment under actual field conditions can the validity of statistical sampling methods in auditing be established. Certainly experimentation can throw light into corners of the subject, which the theorist may not have noticed, or adequately emphasized, and facilitating devices developed by individual practitioners may be of general interest. The assurance of randomness in the samples was a very important factor in this result. For these reasons the following brief description of procedures developed in two successive audits of the same client are presented. The auditors are happy about the sampling for these reasons: (1) more care in each step of the sampling is encouraged, (2) the random sample covers more areas of the accounts, and (3) a very graphic picture of sampling results is given, especially when a working paper tabulation of them is made. These results flow partly from the smaller sample size and partly from the random selection. The client was also pleased with the results.