Reviews the book "Financial Statements: Form, Analysis and Interpretation," 3rd ed., by Ralph Dale Kennedy and Stewart Yarwood McMullen.

Reviews the book "Fundamental Accounting, Theory and Practice," by Stanley B. Tunick and Emanuel Saxe.

This article discusses the challenges to the accounting profession. Accounting education is under pressure from a number of directions. It is caught in the current criticism of all undergraduate schools of business that education for business generally is not sufficiently rigorous, that it has neglected the basic disciplines, that it is too specialized, that it emphasizes procedures and descriptions rather than being analytical in nature, and that all in all it has forsaken the liberal approach and ought to be revised substantially. Professional accountants question accounting education on other grounds. They continually seek not only professionally oriented programs but professional stature as well and are concerned lest the absence of professional schools have undesirable implications, both educationally and prestige-wise. From the functional fields of business, which are agreed that all students of business should have some acquaintance with accounting, one receives complaints that the elementary courses are intended primarily for accounting majors and fail to give non-accounting majors the kind of familiarity with accounting that they need for their purposes.

The article presents the 1957 statement of accounting and reporting standards. An attempt to describe, discuss, or explain the 1957 version of "Accounting and Reporting Standards for Corporate Financial Statements" in the relatively short period allotted to it on this program is almost surely doomed to failure. The 1948 statement, like the 1957 statement, represents a logical development in a continuing evolutionary progression. The second point that is mentioned is that people considered the efforts of the accounting associations and conclusions equally valid with those of previous committees. Those already familiar with the 1951 statement might answer this in a variety of ways. To some it is a disappointment; it does not go nearly as far as they would like. To others, it is a radical departure from the position taken on favorite subjects in past statements. Probably to no one is it the bright flash of revealed truth for which hope springs eternal. At one time or another, the 1948 statement has been criticized on the grounds that it did not give a direct answer to the permissibility of two important accounting practices, direct costing and the accrual of income tax adjustments. The 1957 statement takes a firm stand in opposition to direct costing because the omission of any element of cost in arriving at an inventory valuation is not acceptable.

The author in this article argues that for those students who do major in accountancy, the intermediate course must provide a sound foundation for advanced work in systems, auditing, advanced problems, and theory. He analyses the usual approach to this course in order to consider whether any changes or modifications may be in order. It has been argued that in the development of any course, two general problems must be considered, the content and the level of attainment expected of students enrolled. In the intermediate course in accountancy these problems become especially serious because of the variety of conditions under which the course is offered. According to the author in a given class three different groups of students may be included, non-accounting majors, accounting majors who will find work in industrial accounting, and accounting majors who will take positions in public accounting. The proportion of non-accounting students will very likely be somewhat smaller. If accountancy is offered in the freshman year, students may take intermediate accounting in either the first or the second semester of their second year in college.

The article focuses on accounting for growth of business enterprise. Management must have adequate information as to the progress, or lack of progress, made by the concern for each fiscal period. Over the years, businessmen and accountants, working together, have developed the balance sheet to present data properly classified, clearly set forth, and pertinent to financial position. A well-constructed balance sheet presents in summarized form the various properties of the enterprise classified as to liquidity and sets off against these the various interests in or claims upon those assets classified as to type and imminence of claim. The income statement presents the results of the enterprise activities that are directed at making a profit. An increase in such activities may or may not denote an increase in over-all size. Many a company has found it possible to increase production substantially with no change in productive facilities or personnel. Increased net income may not always indicate increased operations. It may result from reducing or eliminating certain unprofitable operations or it may follow more efficient use of the same resources.

The increased adoption of employee bonus plans by business corporations and the increased amounts paid out under such plans warrant consideration of the nature of these payments and the proper method of reporting them in the income statement. The possible variety of employee bonus plans is almost endless, and it is therefore difficult to consider them in the abstract. Hence the following assumed bonus program, patterned somewhat after an actual case, is presented as a more concrete basis for analysis. This program calls for four separate bonuses paid to four different, but in one case overlapping, employee groups as follows: (1) Factory Workers' Bonus:-a semi-annual bonus to all qualified factory workers (the qualification requirement under all four plans is six months of uninterrupted service) based upon ability and length of service. (2) General Employee Bonus:-an annual bonus to all employees including factory workers but excluding employees covered under the general staff and executive bonus plans. (3) General Staff Bonus:-an annual bonus to all executive officers and department heads except the president and the chairman of the board of directors. (4) Executive Bonus:-an annual bonus to the president and the chairman of the board of directors.

Since the Tentative Statement of Accounting Principles was published in 1936, a considerable critical and explanatory literature has developed on the general subject. No doubt the time will come when this discussion will inspire a reexamination and perhaps a revision of the original statement. With this in mind, the article reviews the Tentative Statement. Several general conclusions may be drawn from an examination of the published criticisms of the Tentative Statement. First, several of the propositions are considered by the critics as being applications of principles rather than principles in themselves. Second, the critics seem to offer no objection to the inclusion of what are essentially definitions and rules. Third, the implication is made that the Statement would have been better constructed, not as a series of equally important propositions, but as principles and corollaries. Fourth, some of the propositions, although challenged, are left in rather an uncertain state because the critics disagree as to whether there is sufficient reason to reject them. Fifth, the wording in many cases has been described as vague, ambiguous, and inconsistent proposals are made for new and additional principles not included in the Tentative Statement.

Compares the accounting education with the practice of public accounting. Description of the working environment of practitioners; Information on the academic environment of professors and students; Factors that complicate the student's transition from school to practice; Contents of a professional education; Directions for accounting education.

The purpose of this article is to note some of the problems the authors faced in their recently completed study of financial reporting for diversified companies. This was their first substantial experience with empirical research and in the completion of that experience they met a number of problems which were new to them. As empirical studies in accountancy are somewhat rare, they have the impression that perhaps others will find these problems novel also and may find some benefit in an explanation of their solutions to them. Thus they seek to share their research experience and hope that others will do the same. Combining a controversial subject, a matter of such sensitivity as the extent of external financial reporting, and a wide participation on the part of financial executives and financial analysts in answering questionnaires, assured them of substantial active interest in the progress and conclusions of this study. Another term for this is "pressure," and they felt this on a number of occasions. However, there is no defense against pressures quite as effective as confidence that one's own position is soundly supported by adequate evidence, the kind of evidence that `an empirical study supplies. Finally, and this may be more closely related to the topic of investigation than to the nature of the research itself, this study included far more variables than they were accustomed to working with at one time. They do not, in any sense, intend to leave the impression that they feel they have the final answers to such problems, rather their thought is that free exchange of experiences and opinions may help each of them to better undertake future studies.