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A conference paper about auditing and accounting is presented. It discusses the definition of critical synthesis which is an antonym for analysis and how the author will analyze research done on auditing practices and accounting. It examines other papers concerning auditing procedures and accounting methods including the one by Neil Churchill.

Probably no task confronting the instructor is more irksome or trying than that of grading papers; yet it constitutes a very important part of his work, and to a certain extent determines his success as a teacher. The objectives in the grading of papers, problems, and books may be summed up as follows, rating a student's work; pointing out errors and seeing that they are not repeated; and finding students weaknesses. The purpose of the article is to present a suggestion that have been helpful in dealing with the second and third points. It has often been laborious to write out all the corrections on a paper, and, in a good many cases, not effective when it is done, because many students do not look at papers which are returned, especially when they have passing grades on them. The form following provides a means of making a large number of corrections and suggestions with the minimum of effort, and in such a way that the student is almost forced to take cognizance of them. The form need not be confined to first year students, as the principles apply throughout the accounting courses, and with some changes and additions can be readily adapted to advanced work.

As a service to the forty-eight states and four territories which use the examinations prepared by the American Institute of Accountants the Institute will grade the candidate's papers and recommend grades to be granted there on by the local boards involved. Papers from some fifty-five hundred candidates were graded by the Educational Director's office in connection with a recent examination. The very weight and volume of this number of papers is imposing. The significance of the resultant grades to the candidates and to the profession of public accounting makes the grading process most important. The methods used to secure uniform and reliable results in this work will be of interest to those concerned with methods of testing and passing upon the qualifications of candidates for the CPA certificate. Under the grading system used by the Institute in Auditing, Theory and Law, where the grading is on a positive basis, it is impossible for the candidate to receive all the points his knowledge might justify if his answer is too brief. Relevant points, assigned some credit in the grading, may easily be omitted in short answers.

An accounting instructor's work is comparable to that of the football coach. The coach can teach his players the theory of football and get them to understand his diagrams but unless he conducts regular scrimmages, he will never develop a football team. The scrimmage for a student of accounting consists of the assigned problems, the workbook and the practice set. So it seems that it would be desirable for the student to work several problems in connection with each chapter. Apparently many instructors fail to face up to the situation. They recognize the desirability of the scrimmaging, but have found no satisfactory way to handle the grading problem. Often the instructor at least implies that the paper are being graded, but the students suspect that they are not. In a situation where objective tests are effective and in certain types of problem tests much time can be saved by having the students grade their own papers. It seems desirable to go over the test thoroughly with the students at the next class meeting anyway, so then is no loss of classroom time if the students grade their own papers.

The interest in uniform accounting or standard accounting in the newsprint industry began to become manifest about ten years ago. In 1916 a firm of public accountants issued a report on the subject. And since that time fairly rapid progress has been made. The movement was greatly facilitated by the attitude that the Governments of the United States and Canada took regarding the cost of manufacturing and price, when the industry was controlled during the war. They insisted that definite costs should be arrived at and this greatly promoted accounting activities in the industry, so that much of the resistance to the development of uniform cost accounting, which has been found in other industries, was overcome in this way in the news print industry. Accountants were employed both by the Government and by the manufacturers to make extensive investigations of costs and related matters and these investigations disclosed the lack of reliable cost data and indicated the necessity for development.

In examinations conducted by the various state boards, problems are often given requiring the preparation of a statement of application of funds. Where the data necessary for solution are few, problems of this type can be worked out without the use of working papers merely by noting the increases and decreases in the balance sheets at the beginning and end of the period. Where the transactions are numerous, it is common practice to resort to the use of working papers. The working-paper method is the plan usually followed in presenting the theory of the statement of application of funds to students by text books in accounting. The candidate for a certificate should not only know the principles necessary to solve a problem involving sources of funds and their application, but also be able to complete the assignment within the time limit. A statement of sources and applications of funds deals primarily with the items out-side of the current-asset-and-liability section of the balance sheet. The article presents, as an example, a problem given in the November 1925 examination of the American Institute of Accountants.

This section presents abstracts of articles published in the March 1965 issue of the journal Oxford Economic Papers. G. C. Harcourt's article, The Accountant in a Golden Age, examines the accuracy of the accountant's measure of the rate of profit under Golden Age conditions where uncertainty is absent, expectations are fulfilled and the rate of profit has an unambiguous meaning. The accountant's rate of profit is defined as the ratio of accounting profit to the historial-cost value of assets. Four main cases are considered: the accountant's rate of profit in a business with a balanced stock of like machines; a growing stock of like machines; a balanced stock of like machines plus financial assets associated with depreciation allowances not used for replacement expenditures; and a growing stock plus financial assets. K. K. F. Zawadzki's article, Are Open Market Operations Effective?, examines conflicting views of several writers on the modus operandi of open market operations and on their effects on the level of bank deposits. The conclusion drawn from this examination is that open market operations can be effective in reducing the cash base of the banking system and in causing a multiple contraction of bank deposits provided that certain conditions are satisfied.

Professor Littleton's paper seems especially timely in view of the present day ideas accounting as a record of original prices and widely fluctuating prices as a normal pattern-there seems to have come the conviction that accounting for outlay cost can no longer be considered a dependable guide to those who look to accounts for essential information. And the conclusion then follows that account keeping or financial statement practice must be modified to suit the new background. The assumption that problems of income distribution dividends, income tax, speculative security profits are of more importance than problems of the measurement of the income generated by the creation of new wealth or the rendering of acceptable services. The assumption that accounting has a more important obligation to supply data useful in managerial pricing policy than it has in facilitating the comparison of past input of services costs with past output of services revenues. The assumption that accounts and statements are merely tabulations of statistical data related to social income and as such are open to any desired manipulations by statistical methodology, such as weighting by index numbers, reduction to averages, elimination of seasonal variations, etc.

The purpose of this article is to describe a method of reducing the time required for preparing a statement of source and application of funds. It consists of substituting two T-accounts for the formal working papers commonly used in source and application of funds preparation. The method is especially useful in examinations because of the great saving of time effected in organizing the information required for the statement. Of the two T-accounts, one is used to accumulate information for determining and explaining the amount of funds provided by operations. The second T-account is used to list funds provided and funds applied, the balance, of course, representing the change in working capital as shown in detail by the statement of working capital changes or determined in some other manner. In preparation of the formal statement of source and application of funds, if time is limited, the student may be allowed to show funds provided by operations as a single figure, since he has already shown the details in his T-account.

As described herein, the "cash-flow" statement is a broad analysis of the cash account. It is not a statement of cash receipts and disbursements, per se. The purpose is to describe the causes of the net change in the cash balance for the reporting period. The causes of this change in the cash balance are embodied In the business transactions which affected both cash and other accounts-balance sheet, income and expense accounts. By relating the changes, during the reporting period, in the balances of all other accounts to their effect on the cash balance, over-all (net) increase or decrease, the "flow" of cash can be described as "cash used for" or "cash received from." The difference between the totals of items making up these two classifications represents the net change in the cash balance. Although the conventional presentation describes separately the effect of the significant changes of the non-current items (assets and liabilities) on the cash balance, and only broadly the effect of all other accounts, if desired, the individual items of costs and expenses of operation could be separately delineated for emphasis to management of the importance of such items and the effect on cash flow of its past decisions as guides for future planning.

The ultimate aim of cost finding lies in the proper usage of the figures produced. In order to make use of figures, the meaning behind them must be brought to light by analysis and interpretation. The aim of this article is to discuss some fundamentals of analysis and interpretation and to indicate some of the steps involved. Breaking up of accounts or figures has to take place since the flow of figures cannot always be set in advance so that they come "out of the mill" as ready-made analyses, usable for all purposes. Analytical work in cost and finance takes principally the shape of working papers. The working papers may integrate perfectly with the books and records of an enterprise and may be impeccable masterpieces. Creativeness should be based on facts or should lead to the gathering of other pertinent facts. Interpretation may be viewed as a catalytic process of the intellect. The analyst absorbs the analytical data and tries to bring to light the significant features behind them.

Real estate is a simple form of capital; but the same underlying principles of valuation apply to industrial enterprises. As Professor Paton has pointed out, the physical elements of the properties and their intrinsic value are only one, and not the most important, consideration. The cost of replacement value of the properties of an enterprise may be considerable, but the enterprise as a whole possesses value only in proportion to its ability to supply human wants and thus create reasonable and continued profits. Economic factors are no less important. The position of the industry in relation to competing industries and competitive conditions within the industry itself; the possible effect of changes in local taxation or in tariffs, on the costs of raw materials and products; the organization of the industry as to price control and labor relations; any or all of these may have an important bearing on the continued profitableness of the enterprise. Some of the most far-reaching and fundamental conditions relating to an industrial enterprise in our complex modern civilization are human and social in their nature. Every successful business must have a sound reason for its existence and that reason is found ultimately in the satisfaction of human wants.

A reply by the authors is presented to commentary by Robert R. Sterling and William Harrison on the article "Capital Market Equilibrium, Information Production, and Selecting Accounting Techniques: Theoretical Framework and Review of Empirical Work," included within the issue. The authors' thoroughly restate and clarify their initial conceptual paradigm, asserting that Sterling and Harrison misattribute their position and research design goals.

This article presents comments in regard to the paper "The Time Series Behavior of Earnings," by William H. Beaver. The author explains that there are several weaknesses with Beaver's presentation of data because he fails to explains the significance of many points that he attempts to make. The author also explores the concept of how the release of financial data is viewed and used by public inquirers. The author commends Beaver's execution of empirical analysis throughout the course of the study and its presentation.

The article discusses stock valuation and the role of dividends. Theoretical and empirical analysis in the paper focuses on several problems including the determination of the cost of equity capital, the minimization of the cost of capital, and the maximization of the value of stock. These problems are overlapping in that they directly and indirectly concern stock valuation. When speaking of stock valuation one must also discuss the role of dividends. Dividends can influence stock value through capital structure and income splitting.

This article presents comments of the author on the paper by Ronald M. Copeland related to the income smoothing. The paper cites a number of prior attempts, by others, to empirically test for the occurrence of income smoothing by examination of financial statements and/or reports to governmental agencies. The author states that in each case, Copeland reasons that the findings were inconclusive. He explains that Copeland then embarks on his own test which appears to be a mere variation of some of the earlier studies, except for the fact that his approach uses multiple rather than single manipulative variables.

The article analyzes economist James Ohlson's paper "Analysis of the Usefulness of Accounting Data for the Portfolio Decision: A Decision-Theory Approach," in order to determine if he's making a model comparison or a model choice. Ohlson's thesis is that he used methods of comparing models, but the author demonstrates the inaccuracies in that thesis. The author tests Ohlson's findings and also considers the portfolio-choice problem and whether the findings are conditional upon the comparison of the forecasting models used.

The article reports on the debate over theories of depreciation with particular focus on the paper "The Calculation of Depreciation" by O.G. Ladelle. "The Calculation of Depreciation" paper presents the formula to calculate depreciation which includes the determination of the decrease of an asset's market value, the division of the cost by the number of years that the asset is expected to last, and the setting aside of each year a constant sum and interest will accumulate to a number that can replace it.

The article discusses the long-term credit determined through financial ratios and reports on the paper "The Determination of Long-Term Credit Standing with Financial Ratios," by James O. Horrigan. Horrigan states, in his paper, that the best variable of an independent nature in the study of default risk is one which can be scaled on a continuum which ranges from certain repayment through certain default; however, he says such a variable does not exist. The author believes an alternative measure of default risk may very well be bond yields or the risk premium on bonds.

The article reports on the predictive power of first-quarter financial reports through empirical research and discusses the paper, "The Predictive Power of First-Quarter Earnings Reports: A Replication," by David A. Green and Joel Segall. The study looks into the problem of external reporting through quarterly reports in lieu of internal reporting for interim purposes. It was found that these interim reports, meant to meet the needs of the investor, failed in doing so. Further study looked into improving the usefulness of interim reports for the purposes of managers and investors.

This article discusses the training of accountants in Scotland. A history of Scottish accountancy is presented. The Society of Accountants in Edinburgh received its Royal Charter on October 23, 1854, making it the world's first official accountancy body. The author looks at the apprenticeship system used in the training of accountants. The examination syllabus is presented. The role of the accountant has been changed drastically by the introduction of electronic computers, which allows them to bypass bookkeeping and run statistical analyses. Current and possible future developments in Scotland's accountancy training are discussed.

This article evaluates studies on accounting theory, conducted by a committee of the American Accounting Association in 1973. The most striking feature of the papers is their similarity. They are essentially two versions of the same work. Both preliminary papers consist of two principal sections: the nature of theories in the physical and social sciences; and the classes of accounting theories, as the authors are able to distinguish them. All of the papers survey pertinent works by mathematicians, philosophers and scientists, and conclude that accounting qualifies as an empirical discipline.

The article presents the author's analysis of the report "An Empirical Study of the Role of Accounting Data in Performance Evaluation," by Anthony G. Hopwood. The author questions Hopwood's claim that almost half of the persons in charge of cost centers were rated as representing nonaccounting styles. Furthermore, the author questions the validity of Hopwood using the term budget in his report. The author believes that Hopwood's paper successfully discusses operating results and budgets, and will be valuable in enabling future research on the topic.

The article reports on professional ethics in the accounting profession and discusses the paper, "Professional Responsibilities - An Empirical Suggestion," by Carl Devine. The author questions the accuracy of Devine's research which involves graduate students in a 2 problem paper exercise as he does not think this simulates the stress of job security and other influences of the accounting profession. He also has a problem with Devine's definition of responsibility and was confused as to whether its operational definition was used properly.

During and after the first World War, France, like many other belligerents, failed to meet her current budgetary expenditure from the revenues arising from taxation. The result of the inflation created many problems for the business man. Depending upon the attitude one holds with reference to the quantity theory of money, inflation either created these problems through its effect in bringing about a very rapid increase in prices, or these problems, created by other economic processes, than by action on prices, finally resulted in a marked increase in prices. French accounting theoreticians had the advantage of the earlier German experience and some of the new accounting methods proposed were but adaptations of German inflation accounting theory and practice. The elaboration of these methods by both French and German accounting theorist constitutes a definite contribution to general accounting theory. An understanding of the principles involved may help in settling some of the controverted questions of principle which attract the attention of accountants.

The article presents information on a simulation technique used to teach students about the interplay between organizational behavior and accounting performance evaluation measures. The simulation was intended to allow students to experience the interplay between organizational behavior and accounting performance evaluation measures. Through the simulation technique, students effectively understood such interplay. Moreover, the experience demonstrated the great potential educational value from employing incorporated teaching materials and methods across traditional course boundaries.

The article presents a commentary on the paper "A Statistical Model of Earnings Estimation," by M. N. Greenball. The author notes that the dividend model used in the dividend tests was not in the form suggested by the empirical evidence in the finance literature. He says there is very little value relating to the dividend test results. The author acknowledges that Greenball's research is useful to the extent that it suggests alternative methods of accounting in light of implications of positive models.

The article examines the flow of messages between the accounting system and other knowledge systems, in particular the information flow between the academic and applied accounting networks. The accounting knowledge system falls within the social science knowledge system and is made up of three subsystems: an academic, a management accounting, and a professional system. This paper is based on the analysis of citations in seventeen accounting journals for the period January 1968 to December 1969. Accounting lies within the social science knowledge system. In this study, the number of messages passed to accounting from the other social sciences and the number of messages passed to accounting from nonsocial science knowledge systems is recorded with a column tabulating the proportion of messages transmitted to accounting from other knowledge systems. The proportion of messages passed to accounting from the other social sciences is similar to the proportion passed to sociology and politics and is greater than the proportion of messages passed to psychology and economics.

In this article the author comments on the two methods of conducting accounting research, the search for universal relationship between accounting variables and the behavior of information researchers, and another approach which considers differences in peoples' use of information systems. The author comments on Edward J. Lusk's research paper related to the cognitive aspects of annual reports that the author claims does not successfully use either approach. According to the author, Lusk's paper is very vague about his experimental procedure, presenting data on eighty-seven randomly selected students and on thirty-four randomly selected financial analysts, not stating how the students and analysts were selected, nor why only thirty-five analysts were included.

The article comments on the paper "The Significance of Selected Accounting Procedures: A Statistical Test," by Nicholas J. Gonedes, that appears in the December 1, 1969 issue of the "Journal of Accounting Research." The author states that Gonedes sets out to test the null hypothesis that the use or nonuse of each of the selected accounting procedures has no significant effect on the measured surrogates of investors' perceived degrees of risk. He explains that Gonedes interprets the results of this test to disprove the null hypothesis.

The influence of alternative accounting procedures on the decisions of those who are assumed to be users of accounting messages is an unresolved issue of accounting. Some members of the accounting community suggest that alternative accounting procedures will elicit different decisions. Empirical analyses of the influence of alternative accounting procedures on decisions have provided neither complete support for, nor complete discreditation of, this point of view. In this paper, we presented the results of additional tests of the significance of alternative accounting procedures. The procedures which constituted the axial considerations of our test included two measurement procedures and one reporting procedure: (1) amortization of the investment credit, (2) interperiod tax allocation, and (3) the presentation of funds-flow statements in annual reports. The theoretical foundation of our methodology embraced the relationships among human action, expectations, and the informational content of accounting messages. A message is a purposefully arranged aggregation of signs. A message has informational content if it affects a communicatee's state of uncertainty with respect to the designata of a message. Given the fact that our environment is characterized by risk (or uncertainty), we stated that a message has informational content if it affects a communicatee's evaluation of the likelihood of an event's occurrence or an object's existence. With the above comments in mind, we attempted to evaluate the significance of, or the informational content associated with, alternative accounting procedures by ascertaining the effects of the tatter on the cost of equity capital (Test I). Since the cost of equity capital is, in part, a function of perceived risk, the differences (if any) in the informational content of accounting messages which are based upon different accounting procedures should be associated with differences in the cost of equity capital. In other words, we used the cost of equity capital as a surrogate of investors' perceived degrees of risk. In addition to the cost of equity capital (which embraces surrogates of investors' expectations), we utilized an at post surrogate of perceived degrees of risk, an actual rate of return, in one of our tests (Test II). The use of an actual rate of return as a tool in our inquiry was based upon the assumption that actual rates of return vary directly with perceived degrees of risk, The specific null hypothesis of our tests was: the use or nonuse of each of the selected accounting procedures has no statistically significant effect on the measured surrogates of investors' perceived degrees of risk. According to our interpretation, the results, generated by our analyses are, in general, indicative of a significant relationship between the informational content of accounting messages and the selected accounting procedures. Yet, we recognized that our results—which do not invariably discredit our null hypothesis—may support alternative interpretations. Additionally, we recognized that the results of our tests suffer from several important. deficiencies. If our interpretation of the results presented in this paper is accepted, then one should expect the use of a particular accounting procedure to affect the decisions of those who use accounting messages, ceteris paribus. Decidedly, if our interpretation is accepted, then one should agree that the accounting profession should strive to formulate explicit criteria for the purpose of evaluating alternative accounting procedures and it should utilize those procedures that are deemed to be "best," given the formulated criteria. [ABSTRACT FROM AUTHOR]

The article comments on the paper "The Significance of Selected Accounting Procedures: A Statistical Test," by Nicholas J. Gonedes, that appears in the December 1, 1969 issue of the "Journal of Accounting Research." The author discusses the effect of the selected accounting procedure on the measured surrogates of perceived risks by investors as well as the inference on the choice of a particular accounting procedure. The article also discusses the problem on recording the acquisition of an asset.

Empirical work inevitably forces us to consider whether and with what revisions the work should be replicated. Professor Stallman's paper suggests many intriguing extensions, but let me single out three which particularly interest me. 1. The relationship between predictive capacity and willingness to depart from fictitious market values needs to be explored. Hopefully these two criteria will not be conflicting. If so, one may be operationally easier to apply and can serve as a proxy for the other. If not, a conceptual choice must be made. 2. Any replication should attempt to avoid possible bias from the manner in which the quoted market prices are determined. Perhaps this can only be done by taking data from a real multi-industry firm rather than constructing a fictitious one. 3. Confidence has been used in only the sense of willingness to differ from others (depart from a fictitious market price). If replications ask for point estimates as well as some confidence interval (e.g., 50%) about the point estimate, the dispersion View of confidence can also be tested. [ABSTRACT FROM AUTHOR]

This article presents comments of the author on the paper "The Auditing Standard of Consistency," by Fred Neumann. The author states that Neumann's paper constitutes a very thoughtful discussion of this subject and that it deserves wide reading by members of the accounting profession. The author explains that it is difficult to reach firm conclusions in this area because of the great variety of circumstances and factors that enter into decisions regarding appropriate disclosure. The article says that it is important first to view the problem of consistency in its proper perspective.

The article discusses the effects of accounting variations on decision making and the paper "An Experimental Design for Study of Effects of Accounting Variations in Decision Making" by R.E. Jensen. The statistical methodology and design used by Jensen in his research of the effects of alternative accounting reporting techniques in the selection of portfolios and their security evaluation is examined as is the data collection. The limitation of whether or not there was adequate control over the research environment and the probability level of the statistical tests is not known in Jensen's paper because he does not mention these issues.

The article reports on the history of information on goodwill valuation. Commercial use of the English term "goodwill" is reported to have begun as early as 1571. Following a paper by Francis More on goodwill read to the Chartered Accountants' Students' Society of Edinburgh in 1891 there has been an increase in information about goodwill valuation as well as accounting in general including the paper by P.D. Leake read to the Leicester Chartered Accountants' Students' Society in 1914. The treatment of goodwill in statements on subscriptions for shares in joint stock companies is a difficult problem.

The article presents an extension of earlier works discussed in "Towards a General Theory of Accounting" and "The Resolution of Some Paradoxes in Accounting." The article adopts the position that accounting is only concerned with the past and present, but presented in a way that remains relevant to the future. The article considers the question of measurement in accounting. The definition of accounting is presented and clarified. The author looks at the monetary and financial aspects associated with choice. Variables to consider regarding the act of valuation are discussed. The author also discussed the accuracy and relevance of accounting measurements.

In his recent article on "Distinguishing Between Purchase and Pooling", (Journal of Accountancy, June 1961) Samuel R. Sapienza stated: Finally, the nature of the accountability for the combination is clearly dependent upon the prior factors as it, in itself, would be an insufficient cause to distinguish a pooling from a purchase. Thus, accountability is a dependent variable. If by this is intended a statement of what theoretically is correct or of what should be the case in actual practice, then there is every indication that accounting theory has been unjustifiably flouted in this area. The two different types of case analysis employed in this paper strongly indicate that great importance in actual practice is attached to the income and asset effects of the alternative accounting treatments of business combinations. At the very least, the study of St. Regis indicates the extent to which the pooling treatment leads to favorable operating results as compared with the purchase treatment. At most, that analysis plus the analysis of the bargain purchase cases indicates that management usually has a genuine choice of whether to pool or to purchase, and that the choice is made on the basis of that method which will give the most favorable results. Enough information is not available to allow a fuller exposition of that conclusion, but on the other hand the cases cited certainly show that the choice actually made by management was not the unfavorable one. The bargain purchase cases go further than the study of the income effects of St. Regis' poolings in showing the flexibility in the choice made by management to pool or to purchase, and in showing that management's decision is based on the effects of the alternative treatments. But the study was not completely sufficient, nor was this intended, to demonstrate that the accounting effects of the alternative treatments were the sole consideration in determining the treatment itself. [ABSTRACT FROM AUTHOR]

This paper draws attention to the increasing use of the concept of "model" in accounting literature. It distinguishes between economic models and accounting models, defines the latter, demonstrates the presentation of a whole accounting cycle in the mathematically formal way of an accounting model, discusses by way of a practical example the independent and dependent variables in such a system and shows how the structure of accounting models is graphically presentable. It finally gives, with the aid of some balance-sheet-ratios, an example of combining accounting models with economic models and indicates the application of this approach to a prospective area which still can be considered to be the accountant's. The paper, however, intends to be nothing more than an experiment. There is no denial that the conscious and systematic application of mathematical models to certain branches of economic science opened new paths and perspectives, not without enriching our insight into many a problem. It therefore seems to be comprehensible if accountants try to dabble and experiment in this apparently promising field.

The advent of electronics in record-keeping and data-processing has placed the office equipment industry in the most challenging, yet potentially rewarding, role in its history. And the same thing can be said for accountants. Electronics is a new mode of transportation. Because of its tremendous speed in carrying out the errands, the electron can take one just about anywhere, statistically speaking. This revolution in office procedures and data-processing, promises to do for man's mind what the industrial revolution did for his body. By harnessing the electron, one will be able to multiply a single clerical employee's efforts many times. In a few more years American business would have been figuratively snowed under by its ever mounting volume of paperwork. At the start of the 20th century, only one man in every 40 employees was a paper worker. With pen and ink as his chief tools, this early-day clerical was able to keep up with all of the demands placed on accounting by business.

This paper summarizes the status of professional training for accountancy in Canada. Incorporated by the special act of the Federal Parliament in 1902, the Canadian Institute of Chartered Accountants spent the first ten years of its existence competing with previously incorporated provincial institutes, which were qualifying individuals as Chartered Accountants (C.A.) across Canada. Eventually the Ontario Legislature, Canada passed a law prohibiting the use of the title C.A. by non-members of the Ontario incorporated Institute. In Ontario, the admission requirement as a student-in-accounts is Grade XIII. For advance screening purposes, the potential student must have obtained an average of third class in the three mathematics courses of Grade XIII: algebra, geometry, and trigonometry. The potential student must obtain employment in the office of a practicing C.A. Each C.A. may employ a minimum of three students and the C.A. is responsible for giving practical experience and instruction. The prospective student may then apply to the Council of the Ontario Institute to be registered as a student-in-accounts. The genesis of the Commerce course in Canadian universities varies. In some institutions, the business administration program originated from the attempts of departments of economics and in other cases, the needs of the business community have led the universities to establish separate departments of business administration.

One of the more important problems in the teaching of accounting is adequate classroom presentation of new material and solutions to assigned problems. Most accounting instructors are not blessed with an ability for freehand drawing nor do all possess a neat legible hand for blackboard work. As a result, much of the blackboard presentation is made up of rough diagrams, abbreviated journal entries, or lopsided schedules and statements. One school of presentation prefers to prepare mimeographed illustrations and started working papers to be distributed to the students at the opening of the class period. The prepared forms eliminate the placing of this material on the blackboard, leaving time free for explanatory computations of the amounts recorded and the students' transcription, accurately or otherwise, of the same material into his notebook. This procedure can be used satisfactorily when introducing the accounting cycle through the use of "T" accounts, introducing simple worksheets, working papers for the source and application of fund statement, and even problems of consolidation.

This article focuses on the orientation and visual aids in the teaching of auditing. Involved more with practical application than with pure theory, courses in auditing from the beginning have been permitted into university curricula somewhat grudgingly and on restricted basis. Traditionally, such courses have been cramped and limited in scope, and relatively seldom have they been able to burst original bounds. To compound this difficulty on the other hand, subject content and legal responsibilities facing the practicing auditor have been on a constant expansive march resulting from new and developing problems and procedures, and from findings and promulgations of the American Institute of Accountants, the Securities and Exchange Commission, the Courts Orientation, not peculiar to the subject matter of auditing alone, may be used to advantage in teaching any subject consisting of a large, intact system or pattern. It is the sound pedagogical approach of moving from the general to the particular. Such technique finds reflection in the financial statement approach employed so commonly in textbooks on elementary accounting.

After all, the most striking fact brought out by the currency experience of all Eastern Europe is that paper money continues to circulate fairly generally despite any degree of depreciation it may suffer, and for that reason a country is not literally forced to quit printing it because of its uselessness. This extraordinary vitality of paper money belies many of the prophecies, but it is really only a natural thing. If notes still pass when they have dropped to the tenth of their original buying power, why not, after all, when they have reached the hundredth or the ten-thousandth part of their former value. Each given stage may be considered a new starting point. He to whom currency is tendered thinks not of its value a year or a month ago, but of its value today and its probable value next week or next month. The degree to which depreciation checks the use of paper money depends upon the speed with which it is being put forth, not on the lowness of the value already reached. Moreover the question whether paper money will ever be redeemed, at par or any other figure, has very little to do with its circulation. Broadly speaking people give thought to the political and financial position of the government issuing the currency not as affecting its ultimate redeemability but only as affecting the probable rate of future emissions.

This article presents comments of the author on the paper by Ronald M. Copeland related to the income smoothing. The author states that Copeland lists attributes of perfect smoothing devices and then states explicitly that decision of the first type, specifically those which affect the level of income for several periods to come, probably are not used for smoothing, while decisions relating to short-lived assets or liabilities are so used. He explains that in another Copeland study he generally used variables, which might well fall into the first class, thus employing, variables classified as nonsmoothing devices to identify smoothers.

The article presents a commentary on the paper "LIFO and the Diffusion of Innovation," by Ronald M. Copeland and John K. Shank. The author suggests that there is some confusion as to what is being attempted in Copeland and Shank's analysis. He explains that the authors state they are testing an alternative to the view that economic variables alone can explain the adoption of innovation and to see if the theory is really useful in explaining the adoption of accounting changes. He notes that there are significant differences in these two purposes.

The article presents a commentary on the article "An Empirical Study of the Cost of Convertible Securities," by Peter H. Knutson. The author notes that Knutson's analysis brought out the unjustifiable nature of the common stock equivalent concept in the primary earnings per share calculation. He contends that the two important earnings per share numbers are actual based on average shares outstanding, which is historical and fully diluted, which is prospective. The author agrees with Knutson's assertion that fully diluted earnings per share provides a close approximation of real earnings per share.