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The article presents commentary and meta-analysis of the Canadian Academic Accounting Association (CAAA) education project. The authors' research studies college students enrolled in university accounting courses in Canada with the objective being to extract information that may be used to improve accounting education. Discussed are two factors of how intermediate accounting students were not the same as other university students. Attention is given to the college students' interest in accounting and psychological profiles. [ABSTRACT FROM AUTHOR]

Accounting is a tool of evidence for reporting assets, equities, liabilities, expenses, revenues and profits or losses of the accounting unit. This information is collectively presented in financial statements, which are an essential source of information for external subjects. Nevertheless, the resulting financial statements are relevant only to the extent to which the information charged in the accounting is correct and error-free. For this reason, the aim of this article is to examine the individual areas recorded in accounting in terms of their possible bias due to an error. The objective of this article is to determine which of the areas of accounting are riskiest in relation to the occurrence of errors, and this in connection to the existence of an important foreign partner of the accounting unit. The risk of of the error occurrence is examined from the accountants' perspective. For this purpose, a questionnaire survey was used for data collection focusing on areas that are considered to be the most important by the accountants and the areas which are the most problematic. The receivables, expenses and revenues were indicated as the most significant. The areas of long-term assets, financial assets and inventories appear to be problematic due to tax impacts. Expenses, revenues, accruals and deferrals appear to be problematic due to issues with correct valuation. The difference in perception of risk of the error occurrence in relation to the existence of a foreign business partner was proven only for some accounting areas such as liabilities, inventories or expenses. [ABSTRACT FROM AUTHOR]

Purpose – This paper aims to analyze Public Companies Accounting Oversight Board (PCAOB) inspection reports on audit reports of those inspected accounting firms in Brazil, Russia, India and China (BRIC). In meeting the requirements of the Sarbanes-Oxley Act, the PCAOB conducts inspections on audit reports of firms listed on the New York Stock Exchange. Design/methodology/approach – The reports include those submitted by both the US audit parent firms and their secondary firms located outside the USA. In each PCAOB report, it unravels the nature of audit deficiencies. The focus is on Big Four because they play a dominant role in the marketplace and issuers’ market capitalization. All the seven-year deficiencies are documented since publications of the reports from 2004 to 2012. Findings – Of the 37 reports, 19 (51 per cent) were issued relating to audits conducted by the Big Four. Out of these 19 reports, 10 (53 per cent) contain inspection criticism. These include audit quality and common recurring audit deficiencies. Research limitations/implications – This paper is based solely on those inspection reports published by the PCAOB. Practical implications – The findings have significant implications to audit firms and the audit profession on improving audit quality, firms’ internal control and reports. Originality/value – No known prior research paper is available on the ramifications of the PCAOB’s inspection reports relating to BRIC. [ABSTRACT FROM AUTHOR]

The purpose of this project is to help students apply auditing procedures that pertain to revenue recognition. In particular, students gain a better understanding of (1) the importance of management's occurrence, accuracy, and cutoff assertions regarding revenue; (2) the relationship between an auditing procedure and an audit objective; (3) how to perform an audit procedure; and (4) how to create audit work papers. The project includes four types of revenue misstatements. Students must design a procedure to detect misstatement, and then determine how to best use supporting documents to provide evidence that recorded sales actually occurred and are recorded at the correct value in the correct reporting period. All supporting documents for this project are stored on the Internet for easy access. This project requires very little class time and the time required of students is very reasonable. Students can also conveniently complete the project anywhere they have access to the Internet. [ABSTRACT FROM AUTHOR]

Amazing Deals Auto Mart (ADAM) is a nationwide retailer of late model pre-owned premium cars. Due to the changes in the industry and economy, its senior management is concerned with a slowdown in collections and loan defaults, and is worried whether or not ADAM will meet the 2005 consensus earnings estimate of analysts. You are required to analyze the accounts receivable and allowance for doubtful accounts data to assess a possibility of earnings management. You are also required to perform financial analyses of the two financing alternatives (securitization and secured borrowing) that ADAM is considering for cash generation from receivables and to determine their effects on financial statements and ratios. [ABSTRACT FROM AUTHOR]

In this case, you will develop an operating budget for Extended Family, Inc., a not-for-profit (NFP) human service organization. Completing this budget successfully requires a high level of decision making, as you must determine the number of cost pools and allocation bases upon which common costs are to be allocated to the organization's three revenue-generating programs. This case will expose you to many real-world issues that NFP financial managers confront when they prepare operating budgets. These issues include: (1) allocating revenue among programs; (2) distinguishing among program, administrative, and fundraising costs; (3) properly treating temporarily restricted contributions; and (4) facing an array of ongoing financial challenges connected with NFPs. [ABSTRACT FROM AUTHOR]

Warfield Company is considering hedging the risk associated with (1) an available-for-sale (AFS) security portfolio and (2) an anticipated purchase of oil. Warfield's Board of Directors has limited experience in this area and has requested that you summarize the accounting and reporting implications if these items are hedged. The hedged risk in these two transactions can be either the risk associated with the cash flow or the risk associated with changes in the fair value. The two risks are discussed in separate parts of the case. In Part A, you will complete the accounting entries required for both cash flow and fair value hedges of the AFS security portfolio and summarize the financial statement impact to help you understand the mechanics and implications of hedge accounting. In Part B, you will complete the accounting entries required for both cash flow and fair value hedges, based on the structure of the transaction to purchase the oil, and summarize the financial statement impact of the accounting entries. You will then use the summary to draft a memo to the Board in which you articulate your understanding of the transaction structures, hedge accounting treatment, the financial statement impact, and documentation requirements for hedge accounting. [ABSTRACT FROM AUTHOR]

This article describes a hazard model that can be used for forecasting bankruptcy. Static models are inappropriate for forecasting bankruptcy because of the nature of bankruptcy data. Since bankruptcy occurs infrequently, forecasters use samples that span several years to estimate their models. The characteristics of most firms change from year to year. However, static models can only consider one set of explanatory variables for each firm. Researchers who apply static models to bankruptcy have to select when to observe each firm's characteristics. Most forecasters choose to observe each bankrupt firm's data in the year before bankruptcy. They ignore data on healthy firms that eventually go bankrupt. By choosing when to observe each firm's characteristics arbitrarily, forecasters who use static models introduce an unnecessary selection bias into their estimates. Hazard models resolve the problems of static models by explicitly accounting for time. The dependent variable in a hazard model is the time spent by a firm in the healthy group. When firms leave the healthy group for some reason other than bankruptcy, they are considered censored, or no longer observed. Static models simply consider such firms healthy.

The Accounting Education Change Commission (AECC) and the large international accounting firms have all emphasized that accountants must be able to work with unstructured problems to be successful in today’s business environment. Measures of this ability are essential if accounting educators are to assist students in improving their abilities to work with unstructured problems. However, there appears to be no measure that has been widely accepted as being the ‘best’ measure. This study considers whether two linguistic performance measures might be usable by accounting educators for this purpose. We use data obtained from a student assessment centre to consider two measures of linguistic performance, idea density and grammatical complexity. We incorporate five criteria in deciding whether these measures could be usable: (1) whether the measures are related to students’ performance when solving unstructured problems; (2) whether the measures distinguish between the ability to work with unstructured compared to structured problems; (3) ease of obtaining necessary information from students; (4) ease of scoring, and (5) robustness of the findings after considering other variables that may have an effect. Our results indicate that subjects’ linguistic performance as measured by idea density meets these five criteria. However, grammatical complexity is not related to performance for either type of problem. These results were found even after controlling for the effects of other variables such as grade point average (GPA), experience, and personality variables. Because the measures can be obtained from virtually any written work produced by students, the information to be scored is relatively easy to obtain. Scoring is also relatively straightforward. [ABSTRACT FROM AUTHOR]

Presents a learning aid in teaching earnings per share (EPS). Provision of a systematic approach for solving complex earnings-per-share calculations; Use of one-page outline in organizing the approach.

In spite ofa rash of accounting problems, strategic moves by accounting firms are taking them away from a commitment to external auditing. That means accounting manipulations and securities fraud may be rising - at a time when the large accounting firms are less prepared to ferret it out Why is this happening? And how can CFOs protect themselves, and their companies?. [ABSTRACT FROM AUTHOR]

Discusses the economic relations between the U.S. and China. Problems about the evaluation and management of investments; Background of accounting standards; Adoption of the accounting standards in some-state owned enterprises.

This article focuses on the income concept, which deals with many major accounting problems. The main focus is on two general concepts, income as an increment in value and income as a predictor of earnings. These may be useful in resolving some problems of income measurement. An understanding of these two concepts may also be helpful in deciding questions of presentation of financial position. The theories underlying income measurement and financial position presentations are, of course, completely intertwined. In practice, the measurements of income and financial position are also fled together, but not always in a beneficial manner. Too frequently the accountant approaches a transaction and chooses the method for recording it that better measures income or better measures the financial position of a corporation. In this paper the author will develop a means of evaluating different ways of recording transactions, without compromising on the quality of either the measure of income or financial position.

The article presents the theory of accounts portion of the Uniform Certified Public Accountant Examination given by the American Institute of Certified Public Accountants on May 20, 1966.

The article provides several problems prepared by the Board of Examiners of the American Institute of Certified Public Accountants presented as the second half of the certified public accountant examination in accounting practice on May 19, 1966.

A recent article in "The Accounting Review" makes a commendable effort to simplify statistical sampling procedures for use by accountants and auditors. Unfortunately it contains a number of mistakes and misunderstandings which seriously limit its usefulness. The suggestion that the tolerances or acceptable amount of error should be increased is questionable. While the original determination of tolerances may have been unduly strict, one should not abandon them merely to make his work lighter. The passage just quoted makes no distinction between tolerance limits and limits of immateriality. Tolerance limits should be set by considerations of both risks due to sampling variability and materiality. Statisticians have developed several improvements in sampling technique which increase the accuracy of a sample of a given size or increase the efficiency of sampling in other ways such as reducing the cost of attaining a desired degree of accuracy. The article utilizes one such technique, stratification, but here again there are several flaws. The gains from stratification come from the reduction of variation within parts by grouping into each part accounts that are similar in size.

The following problems were prepared by the Board of Examiners of the American Institute of Certified Public Accountants and were presented as the first half of the C.P.A. examination in accounting practice on November 4, 1959. One of the major problem includes The Hale-Haworth-Nye Partnership was formed in 1950 with partner Hale contributing the major portion of the capital, and partners Haworth and Nye providing the knowledge and experience necessary for the operation of the business. The Unstable Furniture Company commenced business operations on January 1,1957. All sales are made on installment contracts and inventory records are on a periodic basis. Contract receivables are kept separate by years. At the end of each year adjustments for unrealized and realized gross profits are made through a Deferred Gross Profit on Installment Sales account. The Stanger and Theeler Company established a non-contributing profit-sharing trust for its employees, effective January 1, 1956. Contributions to the trust have been determined to be allowable as a deduction on the company tax return.

The article presents a professional examination for accounting practice. Problems were prepared by the Board of Examiners of the American Institute of accountants and were presented as the first half of the C.P.A. examination in accounting practice on May 15, 1957. The candidates were required to solve Problem 1; any two of Problems 2, 3 and 4 and either Problem 5 or Problem 6. The total weight assigned to this section was 50 points and the examiners point out that the suggested time allowances given below are closely proportional to the point value of the various problems. It is the regular practice of the business at the time a contract is received to set up the full contract price by a charge to Accounts receivable and a credit to Unearned contract sales. As work progresses on an individual contract, progress billings are sent to customers. No entry is made on the books for such progress billings. Collections are entered as a credit to Accounts receivable. Income is recognized on a completed contract basis for statement purposes. At the examination candidates were furnished a work sheet for Problem 5 containing the material in the first two columns of the solution work sheet. With respect to Problem 6, candidates were given the T accounts to be used in preparing their solutions.

The article presents some problems prepared by the board of examiners of the American Institute of Accountants as part of an examination in accounting practice. The first problem required a student to prepare a schedule showing the cash payment of the buyer to the selling party, profit and loss statement of the company involved in the transaction and total taxable income statement of the selling party on the basis of information and conditions given to him. The second problem required the student to prepare a schedule showing how cash payments should be made to partners who are selling, with the realization of assets. The third problem required the student to prepare entreaties to reflect the exchange on the books of a corporation and compute depreciation on the purchase made by the corporation on the basis of the entreaties. The fourth problem required the student to prepare a statement accounting for the decrease in net working capital and a statement accounting for the decrease in cash on the basis of the information supplied. The solutions to each of the problems have been provided.

The article presents comparative rather than absolute limitations, a problem that faces accounting, and deals with purchasing power measurements in accounting. In recent times, two basic economic fears, namely, inflation and deflation have been developed which involve concern about the purchasing power of the dollar, and its lack of monetary stability or shifting of the price level. The general price index, or any one of its broad subdivisions, is admittedly no more than a very general indication of what "package" of goods and services a given quantity of money will buy under certain conditions of time and place. The price index blends indiscriminately the effect of monetary factors with such factors as output, technology, wage bargaining, etc. The problem of inflation may be delimited and treated as involving determination of the cost of goods delivered to customers, determination of the cost of utilization of long-term assets, and measurement for administrative and other purposes of return on capital investment.

The article presents problem prepared by the Board of Examiners of the American Institute of Accountants and presented as the first half of the Certified Public Accountants examination in accounting practice on May 12, 1954. The candidates were required to solve problem 1 and 2 and any three of the remaining four problems in 50 points. The first problem is related to review of tax return. Candidates are required to prepare a schedule showing computation of the amount of the apparent discrepancy by using the given information. The second problem requires the examinee to prepare a formal balance-sheet and income statement of a manufacturing firm from the given records of transaction provided in the problem. The third question requires the examinee to compute the gross profit percentages, reproduce the ledger accounts for installment contracts receivable in T-account form and calculate net loss on defaulted accounts. In addition to this the examinee is required to prepare a schedule showing the realized gross profit.

The article presents problems that are prepared by the Board of Examiners of the American Institute of Accountants and were presented as the first half of the C.P.A. examination in accounting practice in November, 1948. The candidates were required to solve all problems. One of the question is that the Waverly Manufacturing Company has decided to change its method of distributing factory burden to its products, all of which are manufactured on special order. An appropriate departmental rates, based on the company's operations for the first half of 1948 is to be developed and to illustrate their use by determining the cost of Job Order No. 987 by applying the rates you develop. Another question is that monthly cash budget for AB Trading Company for the three months ending March 31, 1949. AD Trading Company purchases merchandise on terms of 2/10, n/60, and regularly takes discounts on the tenth day after the invoice date. It may be assumed that onethird of the purchases of any month are due for discount and are paid for in the following month is to be prepared from the information given.

The following accounting problems were prepared by the Board of Examiners of the American Institute of Accountants and were presented as the second half of the Certified Public Accountant examination in accounting practice on May 15, 1947. The candidates were allowed four and a half hours to solve problem 1 and either problem 2 or problem 3. Problem 1 was given a weight of 30 points and 20 points was assigned to either problem 2 or problem 3 From the following information, prepare a balance-sheet as at December 31, 1944, in accordance with the authorization of board of directors referred to below. The adjustments should be clearly keyed by letters or numbers on working trial balance. The Construction Corp. is engaged in a variety of construction work under contracts, the collections on which are made on the basis of engineering and architects' estimates as to stage of completion. Customers usually retain a percentage of the amount of each estimate pending completion of the contract. Gross profit on contracts has been shown in the books and financial statements in the year of completion.

This article presents accounting questions that were prepared by the Board of Examiners of the American Institute of Accountants and were presented on May 14, 1947 as the first half of the certified public accountant examination in accounting practice. Candidates were allowed four and a half hours to solve two problems. Time limit for each question was also specified in the question paper. Problem 1 carried a weight of thirty points and problem 2 a weight of twenty points. The first question presents trial balances of a company and its subsidiary at December 31, 1945. From them and the other information given in the question, the examinees had to prepare a columnar consolidating work sheet showing in separate columns a consolidated balance-sheet and a consolidated income statement at December 31, 1945. For the second problem the examinees were asked to prepare a columnar worksheet of a company showing the postings of cash transactions, the adjustments, and the cash available for final distribution, a statement of loss on realization and expenses of liquidation and a statement showing the amount of cash to be distributed as a liquidating dividend to each stockholder.

This article presents four questions, prepared by the Board of Examiners of the American Institute of Accountants, for accounting students which were asked in the Certified Public Accountant (CPA) examination in accounting theory and practice held in May 1939. It also provides explanatory answers to these problems. Candidates who appeared in the examination were required to solve all problems in six hours. The first question described here is concerned with the topic of stock and investment accounting and decisions; while the second one is concerning sales and purchase in retail trade accounting. The other two questions are concerned with accounting problems of property lease and real estate businesses. Answers are detailed with special comments for clarifying the statements prepared in answers. Proper scheduling of time for each question individually by the student is also suggested to effectively solve these questions.

This article focuses on the basic content and needs of the auditing course. It describes that auditing is considered as the application of accounting principles to the various transactions which come before the public accountant in his daily work. It is advised that instruction in auditing should essentially include not only the application of the principles to a certain transaction but the application of the principles to the same type of transaction under varying conditions and circumstances. As an advanced subject auditing is restricted to those students who have satisfactorily completed courses in other accounting subjects such as bookkeeping, theory of accounting and accounting problems. It should not include detailed discussions of principles of accounting, or give any basic instruction in such principles. The course in auditing as distinguished from other courses in accounting and many other subjects should emphasize continually the habit of clear thinking.

This article presents cases which are resumes of situations of interest to accountants, arising in the work of the Securities and Exchange Commission. In each instance, a problem appears together with the solution brought about by recommendations of the Commission's staff. The names of registrants do not appear, but if further study of any one or more cases is desired, the names may be secured from the editor of the "Review." The balance sheet of a distilling company showed "Fixed Assets: Property," plant and equipment at cost. The notes and schedules referred to indicated that, of this amount, $48,343.81 represented property "purchased on a lease-purchase contract," was payable as rent, in monthly installments and "at the expiration of the ten-year period legal title is to pass to the purchaser." In the opinion of the Commission's staff, because of the nature of the contract, it was improper to designate on the balance sheet any part of the amount to be expended under the lease-purchase contract as "Property, plant and equipment" before the expiration and fulfillment of the contract.

This article presents problems and their solutions prepared by the Board of Examiners of the American Institute of Accountants, which were used in the C.P.A. examinations of thirty- eight States and three Territories on November 18-19, 1937. These problems constitute the first half of the examination in accounting theory and practice and are reproduced by permission. In the preparation of the solutions which follow the problems, the total time allotted has been kept in mind, in the hope that those who find this material of interest will gain some idea of the form and content of papers that may reasonably be expected under examination-room conditions. It also says that other selections from the Institute examinations and from the examinations held elsewhere will be presented in future issues of the journal "Review."

In the June 1930 issue of the journal "The Accounting Review," there was published a series of short tests in accounting theory and practices, which had been developed at the University of Minnesota. Somewhat later, in March 1931, the journal carried a series of first-year examinations which had been given at the University of Illinois. In this article two sets of examination questions in first-year accounting are presented which have been developed and used at Cleveland College of Western Reserve University. These examination questions are again of the objective type, and they may be of interest in that they reveal further possibilities of using this type of test. Some of the questions included in the first set are, how should accounts ordinarily be arranged in the general ledger, what do the equities shown by the liability column of a balance sheet represent ordinarily, what is a balance sheet intended to show, what is meant by double entry, what does a debit mean in modern accounting and how should assets be listed in a balance sheet.

Reports on the argument in the congress regarding the legislation of the generally accepted accounting principles (GAAP) in the U.S. Interest of Securities and Exchange Commission on the legislation of GAAP; Involvement of the private and public sector in the legislation issue; Identification of two accounting problems with the accounting principles.

This article presents a proposed auditing exercise which can be used in discussing a taxonomy of evidence and evidence-gathering techniques. This exercise involves the use of a view-graph slide showing a scene that contains qualitative as well as quantitative characteristics. The particular slide that the author uses shows a profile of people riding on a bus or street car. The scene is fairly typical in that some people are standing while others are sitting, and the vehicle is carrying men, women and children of different races, some of whom appear to be engaged in conversation. This exercise is built on the maxim that a picture is worth a thousand words. The auditing instructor can develop any number of taxonomies to discuss evidence and its reliability. However, many students will probably not get the message. The exercise is a symbolic rather than logical means of communicating the message. It does not have to replace the professor's scholarly and logical explanation, but it can reinforce it. Three specific and relevant points can be made to auditing students in the discussion following their participation in the exercise. First, the evidence-gathering technique of observation can be evaluated. A second pedagogical point for which this exercise can be used is to discuss the variations in the reliability of audit evidence, especially testimonial evidence. A final pedagogical benefit of this exercise centers on the communication skill needed by the auditor.

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.

Large classes in accounting, the limitations of time, working conditions, reading assistance, and the other pressures of the examination period make a problem in accounting which appears to be an adequate test of both theory and technique of interest to instructors of the subject. The article presents an accounting problem which can be set up and worked on two standard mimeograph sheets has been found to be a successful device. It can be easily and quickly graded, and the dispersion of the resulting grades correlated very closely to other tests and opinions of the calibre of the students who attempted its solution. It should be added that students were permitted to use any reference materials they wished during the period of the examination. Effectiveness in teaching, because of the vast amount of material offered in the average course in accounting, may be determined by the approach selected and the material emphasized during a period of instruction. The article also presents a skeleton-plan consisting of five accounting concepts and detailed explanation of three aspects of the accounting mechanism.

Challenges traditional social accounting disclosures at different levels. Recognition of economic activity as part of the environment; Extension of capital maintenance to manmade resources; Responsibility faced by management accountants; Suggestion for the use of ecology in the twenty-first century.