Book review, Accounting theory

Presents a foreword for the October 1971 issue of the periodical "The Accounting Review."

Reviews the book "Horizons for a Profession," by Robert H. Roy and James H. MacNeil.

The article focuses on the nature of future accounting theory. The scope and methods of accounting are changing and can be expected to continue to change in the future. The 1965-1966 Committee in Basic Accounting Association of the American Accounting Association examined ways and means by which accounting theory could facilitate the development. It concluded and means by which accounting theory could facilitate the development. It concluded that a tentative set of broad guidelines for future accounting research was appropriate. The Committee examined the basic nature of accounting, essentially, an information system. Accounting emerges as a part of the general information system of an operative entity and as a part of a basic field bounded by the concept of information, and academic research in both of these areas is appropriately within the scope of accounting research. The Committee noted certain developments in quantitative methods and behavioral sciences and recognized that the accounting discipline could be expanded either by absorbing the additional measurement technology with the discipline or by broadening the scope of activities upon which accounting reports.

Recent developments in learning theory suggest an opportunity for substantial improvement in methods for teaching accounting. Since 1954, there have been significant findings in the area of educational psychology, which appear to have a bearing on how students learn accounting, and how it might better be taught. These new laws of learning differ in many respects from the old laws of learning developed prior to 1940. This article notes some of the old laws of learning and the teaching methods they support and then examine some of the new laws and their implications to accounting instruction. These old laws are not necessarily completely false, but they are in some ways false and open to reexamination. If a judgment had to be made on them, it might be that they and many others like them are more false than true. There is a need to distill out their essential truth and define the conditions where they apply and to learn also the conditions under which some other generalizations hold. Research in accounting educational methods is a great need.

Reviews the book "Accounting and Business Fluctuations," by Dalmas D. Ray.

Reviews the book "Cost Accounting and Control," by Cecil Gillespie.

It has been the purpose of this presentation to indicate the thinking of the Cost Committee in developing a statement of concepts of business costs. Possibly the most significant contribution of the study is that it recognizes the various measurements of costs and provides a framework so that all business cost may be grouped under the three headings of planning, control, and income determination. Implementation of the basic concepts of cost for planning and control rests upon various approximations of these basic concepts. Historical cost is well established as one method useful in approximating the basic concepts. An examination of the nature of the historical cost recording process indicates that it is possible, with complete consistency, to develop more pertinent information for planning and control than that now provided within the framework of recording which supplies information for the published reports on income and financial position.

Reviews the book "Realistic Depreciation Policy," by George Terborgh.