This article focuses on statistical controls applied to financial statements. Most top executives, except controllers, are not specifically trained in accountancy. Yet the top executive spends much of his time on the financial aspects of his business and in the interpretation of accounting records. Sometimes he finds himself studying detailed and massive accounting reports, trying to find in them the clues to his problems. When the analysis of past data has been completed, top management can use the charts for setting goals or objectives in the future, and can follow month by month the progress made toward each goal. It might be argued that these effects of the end of the war would have been realized by top management without the aid of the chart. That is undoubtedly true, but the strength of action charts is found in a number of factors, in their graphic appeal to understanding through the eves, in the power they have to sell all levels of supervision on the necessity and wisdom of management policies, and in the completeness and clarity with which they enable the men at the top of a business to trace the effects of such external events as war, peace, price changes, booms, and depressions.

The article presents information on statistical uses of accounting data. The distinction between bookkeeping and accounting is a significant one. Bookkeeping can be defined as the procedure used in recording business transactions. Accounting is the organization and analysis of the records. From the statistical point of view this division of labor can be compared first with the posting and computations of statistical data, and second with the collection and interpretation thereof. Many other valid parallels can be drawn between accounting and statistics. Both deal with figures, both require analytical skill, both apply to their data highly specialized techniques. Accounting demands that debit and credit entries balance to the last cent. Statistics is content with nearest thousands or even million depending upon the size of the figures, because the statistician's work is largely estimating for the purpose of formulating policies and action. The accountant, trained to exactitude, may not understand the statistician's tendency toward approximations.