Reviews the book "Economics of Accountancy," by John B. Cunning.

The accountant who looks upon accounting as a relatively finished system of technique and a relatively complete body of theory has his face turned to the past rather than to the future. He is as far out of touch with the actual situation in which we live as the economic theorist who makes the economic man the cornerstone of a supposedly universal system. As business administration becomes more professional and scientific, the relationship which has in the past prevailed between management and accounts places a two-fold burden upon accounting. It is expected to continue its function as a tool of control and at the same time it is called upon to furnish management both the facts and the principles upon which scientific administration must rest. In meeting the latter requirement it becomes essentially a scientific methodology. As such its rôle is to afford a basis for the coördination of business administration with the current scheme of economic and social organization. This discussion has dealt with potentialities of accounting development rather than with so-called actualities. It has been argued that accounts must be readjusted to a new viewpoint of management and that in order to effect such a readjustment fundamental changes of technique and rules of procedure are necessary. It has been suggested that the result desired may be obtained by a decentralization of accounting problems and a thorough functionalization of the accounting system. With our present knowledge of social phenomena, one would be rash indeed to insist that particular developments like those here suggested, must take place. There are some things, however, upon which we can depend with definite assurance. Accounting, like all other institutionalized practices, must adjust itself to a changing environment if it is to survive.

There is one major problem confronting the accounting profession that will occupy the attention of the administration of the Association of University Instructors in Accounting in the year 1931. Avenues of entry into the practice of accounting are not clearly defined. It is extremely difficult for a young man who shows some aptitude in this field to determine upon the proper method of preparation to secure admission to the profession. Up to the present time the professional societies have not set forth the qualifications of an accountant or the proper training methods. It seems to the author that the time has come for practitioners and teachers of accounting to attack this problem with a view to establishing a relationship that compares with other professions such as law, medicine and engineering. The present situation perhaps is to be expected in a young and growing profession. Accounting has passed the stage of infancy now and it seems that it should be ready to accept implications involved in being recognized as a profession. There are still some who look upon accounting as a trade or business but most practitioners prefer to be known as professional men and to have their occupation recognized by the public as a profession.

To budget machinery raises many difficult problems. The first problem is to determine the period which the budget should cover. In budgeting the sales and production of a business, the fiscal period, usually a year, is the basis followed. A monthly detailed budget supplements the annual budget. There are several reasons for using the year as the basis for budgeting sales. First, it is the period covered by the profit and loss statement. Second, the year is a comprehensive enough period to include all the seasonal changes, and thus the relation between seasons may be determined. Third, the yearly budget provides a basis by which comparisons of similar periods in different years, or full years may be fairly made. These reason also hold good for the budgeting of production on a yearly basis, productivity depending on the same seasons fluctuation as do sales. In budgeting machinery, however, the fiscal year may not be the logical period. There is no relation between the fiscal year and machinery production.