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Book Reviews

FACTORY ORGANIZATION AND ADMINISTRATION. Second

Edition. By Hugo DIEMER. The Ronald Press Co., New York,

1914. Within the limits necessarily imposed by a moderate sized volume Professor Diemer has covered ably many fields of action comprising the science of industrial management. These fields of action, as stated in chapter 1, include the following: Finance; organization; accounting ; industrial plants, their service and process equipment; selection and handling of employees; production systems and methods; and distribution, including selling and advertising.

The author criticizes the questionable practice of consulting experts who "have gathered together certain peculiar methods and have added to them certain principles of management, and then dubbed the whole the ‘Blank System of Management.'' As being in sharp contrast to such procedure he refers to Dr. Taylor, the father of modern manufacturing efficiency, who prefers the term “scientific management” to “the Taylor system."

In chapter IV the various types of organization are described and interesting charts given illustrating organizational principles.

In a chapter dealing with the general principles of cost accounting Professor Diemer compares the various methods employed in allotting expense burden. He favors the hourly machine rate method and includes in this rate interest on the purchase price of the machine. Even if the greater accuracy of the hourly machine rate method as compared with the other methods described is admitted it will be obvious that the adoption of the former will in most cases add considerably to the acco

counting expense.

Chapter XXII dealing with the functions of the cost department is of particular interest to accountants. Professor Diemer's opinion of cost accounting is embodied in his statement that "naturally the final development of a cost system is the figuring of the cost of each individual piece as well as of each operation on that piece.” This method, however, if applied to a concern manufacturing standard machines involving thousands of parts and tens of thousands of operations would result in an accounting expense entirely out of proportion to the results obtained. It would simply ascertain the costs of the same parts over and over again.

In place of a detailed system, the tendency of modern cost accounting is toward a standard or specification system whereby once the cost of each part, assembled part, or complete or finished unit of product has been carefully ascertained, these particular costs will stand as the basis of all future computations until changes in manufacturing conditions (either in the kind or quality of material used, in the labor operations or overheads) render the existing costs meaningless or misleading. By this means the essential information required is obtained and, as has been demonstrated by actual test, with an accounting expense a fraction only of what would be required under a system of continuous detailed cost accounting such as described by Professor Diemer.

Generally speaking, Professor Diemer's work will repay careful study by accountants, particularly those who undertake to design and install systems. It must be confessed that accountants in installing systems are apt to view all problems presented too much from the viewpoint of the accountant and too little from that of the manufacturer, and a study of Professor Diemer's work will doubtless lead such to a realization of the larger issues at stake when this kind of work is undertaken.

The author states that the work of the industrial engineer "involves technical knowledge and ability in science and pure engineering which do not enter into the field of the accountant.” This is obviously a correct statement, but it should be borne in mind that the field of industrial engineering involves a knowledge of finance and accounting only obtainable by the trained accountant, and the failures of systems installed by engineers have doubtless been due as much to a lack of sound accounting knowledge as has the failure of system designs installed by accountants been due to the restricted viewpoint of the accountant. As a matter of fact, the field of industrial management is so wide as to necessitate the assistance of both engineer and accountant, and it is through the cooperation of these two professions that the most permanent and satisfactory results are obtained.

G. CHARTER HARRISON.

BEEK.

ANCIENT DOUBLE-ENTRY BOOKKEEPING. BY JOHN B. Geijs

The Ronald Press Co. New York, 1914. $5.00. Ancient Double-Entry Bookkeeping is primarily a book for the bibliophile and the scholar; within its covers may be found many interesting facts that will afford the average man much entertainment.

Nearly every other branch of human endeavor has its well-defined history compiled from the exhaustive researches of many historians; but of that vital department of the commercial world, the keeping of accounts, there was very little of history until a few years ago. In fact it has long been the boast of modern accountants that only the many complexities of modern industry, its combinations, trusts and ramifications from individual corporations into immense holding companies, brought the profession of public accountancy to the position it holds in the commercial world today. The author of the present volume contends that the profession of accountancy is almost as ancient as that of law, and he has taken his readers back to the first printed work on the subject, written by a Franciscan friar, Lucas Pacioli, who lived and wrote in the little Italian village of Sancti Sepulchre, near Venice, in 1904. From this early work it is shown that even at that time there were well defined principles of bookkeeping and accounts, and that then as now the labors of the accountant were bent towards systematizing and making uniform the many methods in vogue.

The making of Ancient Double-Entry Bookkeeping shows the result of years of research through many European libraries, the acquisition of several rare books, and finally the laborious translation of medieval vernacular, and the compiling of the thoughts of several early writers which show that the modern accountant plods faithfully in the footsteps of the Franciscan friar of five centuries ago.

The book is from the W. H. Kistler Press, Denver, and is a creditable example of the bookmaker's art. It is compiled to show on the left-hand pages photographic reproductions from the original authors in Italian, Dutch, German and early English and on the right-hand pages the modern English translation. The book is replete with reproductions of early bookkeeping forms and the painstaking methods of internal checks, many of which are in use today.

The ancient authors reproduced are Lucas Pacioli (Italian) 1494; Domenico Manzoni (Italian) 1534; Don Angelo Pietra (Italian) 1586; Matteo Mainardi (Italian) 1632; Jan Ympyn Christoffels (Dutch) 1543; Simon Stevin (Dutch) 1608, and Richard Dafforne (English) 1636. The works of many other contemporaneous authors are discussed, but the reproductions of the seven mentioned form an unbroken chain from the earliest authorities on bookkeeping at the time when Venice held the commercial supremacy of the world down through Holland's leadership in commerce, and through the English to America. The author points out that America may have obtained her accounting from the early Dutch settlers of New York, which might account for the differences between American and British methods of accounting.

Ancient and Modern Bookkeeping is a book containing many books, most of which are either out of print or are so rare and expensive as to be out of reach of the majority. It is worthy of a place in the library of every booklover.

Announcements

Kansas City School of Accountancy, Law and Finance

The educational committee of the Kansas City chapter of the Missouri Society of Certified Public Accountants has for three years past been cooperating with the Young Men's Christian Association in conducting the Kansas City School of Accountancy. The school has been a success and has prepared many candidates for the C. P. A. examinations. It has now been decided, however, to make new arrangements whereby the Kansas City chapter takes entire charge of the school. Headquarters have been obtained in the Hall Building and the following trustees have been elected by the chapter : Chairman, Frederick A. Smith ; secretary, F. A. Wright, Jr.; treasurer, Edward Fraser; Albert J. Watson and J. D. M. Crockett.

New York C. P. A. Certificates Issued

Since the first of July certificates as certified public accountants have been issued to the following in the state of New York: Messrs. Claude F. Griffis, Arthur H. Harris, Herbert B. Hawkins, Philip H. Hessol, Benjamin Jacobs, Peter J. Kane, Wilbur L. Lytle, Winfield McKeon, Leslie E. Palmer, L. Moss Pangborn, John F. D. Rohrbach, Clifford E. Scoville, Louis Simonoff, George H. Sinnott, Joseph Sobel and Joseph Weiss.

Colorado Society of Certified Public Accountants

At the annual meeting of the Colorado Society of Certified Public Accountants on August 13, 1914, the following officers and directors were elected: President, F. W. Deidesheimer; first vice-president, Emil W. Pfeiffer; second vice-president, Morton M. Hamma; third vice-president, John S. Williams; treasurer, F. H. Bentley; secretary, A. E. Keller; assistant secretary, T. H. Reddington; auditor, W. S. Dent; directors, F. W. Deidesheimer, C. G. Weston, Emil W. Pfeiffer, Leonard Dates, S. R. Schaeffer, F. B. Reid, F. J. Spencer, C. E. Strong and F. D. Stackhouse.

Minnesota Society of Public Accountants

At the annual meeting of the Minnesota Society of Public Accountants on August 27th, 1914, the following officers were elected: President, R. D. Webb; secretary and treasurer, Edgar C. Salvesen. James S. Matteson of Duluth was elected director in place of J. Gordon Steele, resigned.

Michigan State Board of Accountancy

At the examinations conducted by the Michigan state board of accountancy in June the following candidates were successful: George M. Patterson, Grand Rapids; William C. Rowland, Detroit; George R. Gibbs, Detroit; and E. Leroy Coe, Detroit.

Massachusetts State Board of Examiners

The bank commissioner of Massachusetts has appointed as members of the Massachusetts examining board the following: Gerald Wyman, C. P. A., chairman, Waldron H. Rand, C. P. A., secretary, Walter L. Boyden, C. P. A., Augustus Nickerson, C. P. A., and J. Edward Masters, C. P. A.

M. O'K Crowley, C. P. A., C. A., and John J. Quinn have opened offices in the Woolworth Building, New York, under the firm name of Crowley, Quinn & Co., accountants and auditors. A branch office will be opened in Chicago on January ist, 1915.

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When called upon by your esteemed president to prepare a paper to be presented at this meeting, the honor was felt to be such that I was constrained to consent, although doubting my ability to contribute anything that would be of any considerable value. However, inasmuch as the subject of the paper was left to me, and not recalling any specific treatment having been given at any of your conventions, or at any of the annual meetings of the American Association of Public Accountants, of the subject of secret reserves, the thought occurred to me that some benefit might accrue to our profession through a full and free discussion of the attitude to be assumed by the professional accountant when faced with such conditions as this subject would present.

It is to be understood and remembered that the attitude of the accountant, when called upon to audit the accounts of an incorporate company (whether it be a bank or an organization for the purpose of operating in any of the various capacities which are embraced in modern business activities; and whether he be employed by the stockholders or by the directors or even by the managing director or president of the company), is clearly defined and his duty is to the stockholders who are the owners. Any report or statements he may make must be made in the same impartial attitude as would be the case if he had been elected by vote of the stockholders at the annual meeting of the com

• This paper was prepared to be presented at the annual meeting of the Dominion Association of Chartered Accountants to be held at Halifax, Nova Scotia, in September last. The breaking out of the European war prevented the holding of the meeting at the time set ; consequently the paper was not presented.

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