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MANAGEMENTACCOUNTING

Profession Women in Management Accounting: Moving Up... Slowly 20By Susan Jayson and Kathy Williams

More women than ever are carving out careers in accounting and finance. To find out howwell they are doing in business and industry, MANAGEMENT ACCOUNTING surveyed 500 ofNAA's women managers, controllers, chief financial officers, and company presidents —and here are the results.

Women Accountants —Do They Earn as Much as Men? 27By Josephine Olson and Irene Frieze

Contrary to popular belief, not all women with MBAs in accounting believe their careerchoice offers a lucrative salary and an executive title.

Surviving Your First Job 32By Patricia Douglas, Teresa Beed, Karen Clark, and Sylvia Weisenburger

Technical proficiency is the first step, but it doesn't guarantee success. You also need tomaster office politics, behavior, and attire appropriate to your company, and social skills.

Manufacturing Operating Rhythm 36By James Wagner

The introduction of production and inventory management techniques such as MRP, JIT,and OPT have made factories more efficient. Operating rhythm (OR) goes one step fur-ther— building on OPT to ensure that a company's operations harmonize for a greatercorporate return.

Cost Paragon Pricing 41Control By John A. Pearson

Manufacturers using a costing system based on practical capacity receive immediate taxbenefits when they go through periods of economic downturn-

Benefit-Cost Analysis as a Performance Indicator 44By G. Stevenson Smith and M.S. Tseng

This management accounting technique can evaluate the efficiency and effectiveness ofan organization's programs and personnel.

Contracting Restoring Public Confidence in Government Contractors 51By Fred J. Newton

When taxpayers learn that the Pentagon has been buying three -cent screws for $91 theybecome highly irate and lose faith in government contracting. A government auditor de-scribes how faith can be restored in government contracting and still allow contractors tomake a decent return.

Brainstorming Dow Opts for Less —and Gains 56By Dennis Dankowski

In the first of a series on how members solved critical accounting and financial problems, aDow manager tells how the company decided to reduce its reporting —not increase it.

MANAGEMENT ACCOUNTING /JUNE 1986

MAP MAP Statement of Purpose and Operation 58This new Statement on Management Accounting explains the purpose and operation ofthe series.

NAA NAA Topical Index Vol. LXVII 65By Staff

Departments Perspectives economic service 4

Opinion the entrepreneurial instinct is sti ll wi th us 6

Taxes cash boo t received treated as capital gain 8

Computers and Accounting a super IBM XT compatible 10

Management Accounting Practices MAP committee actions 12

Research advising small businesses on microcomputer so ftware 14

Letters to the Editor accounting education: the Ph.D. `problem' 15

Data Sheet more U.S. f i rms borrow abroad 17

Managing Your Career how to tell the boss the bad news 18

Institute of Certified Management Accountants Beyer medal winners 40

Accounting Education more NAA student chapters needed 50

In the Library 61

People in the News 70

New Products /Services 72

Advertisers' Index 72

Cover: By Mandel & Wagreich, Inc.

Views expressed herein are authors' and do not represent Association policy unless so stated. Publi-cation of paid advertising and new product and service information does not constitute an endorse-ment by the Association of the advertiser or the product or service. Quantity reprints of any article inMANAGEMENT ACCOUNTING or back issues (subject to availability) may be obtained from Special OrderDepartment, NAA, P.O. Box 433, Montvale, NJ 07645 -0433.

Authorization to photocopy items for internal or personal use, or the internal or personal use of specif-ic clients, is granted by the National Association of Accountants to libraries and other users registeredwith the Copyright Clearance Center (CCC) Transactional Reporting Service, provided that the basefee of $1.00 per copy, plus 10c per page, is paid directly to CCC, 21 Congress St., Salem, MA 01970.0025- 1690/86 $1.00 + 10c.

MANAGEMENT ACCOUNTING /JUNE 1986 3

PERSPECTIVES

Economic Service

The National Association of Accountants is a recognized education-al organization. It concentrates its interests within the fields of finan-cial management and professional accounting. In those areas ithopes to render a broad economic service to its membership and tothe financial community. Maximizing this service is the challengethat faces each administration.

The Association effort stands firm on three legs. First, it dependson the paid staff at Montvale. This group provides the organizationalexpertise and the operating continuity that sustains the effective ca-pacity of the total effort.

The second element of organizational capacity is represented bythe national commit t ees and their ad hoc counterparts. Thesegroups are expected to provide the innovative thrusts that discoverand organize new programs and carry them forward to their goals. Itusually happens that only a few of the committees receive specialattention in any given year. In part this is due to the energy of partic-ular chairpersons or committee members; more probably the spe-cial notoriety occurs because of the timeliness of the subject mat-ter. Undeniably, however, the professional reputation of theAssociation becomes enhanced as new activities are started andthe Association is led into new arenas of economic service.

The third element of strength —and probably the most essential —lies in the chapter and council activity. It is at this level of operationthat contact is made with the full 90,000 members. The NAA existsprimarily to be of service to that membership and its interests. Onlyif tasks are competently and enthusiastically done at the chapterlevel will the membership be serviced and the needed resourcesmade available for the work of the national committees and staff.

During the past year I have heard at various times that "nationalis not interested in what the field wants" and I have heard it saidthat "the field is not interested in professional matters; it only wantsto have pleasant little dinner sessions." These are isolated com-ments and obviously they do not represent the majority view. How-ever, they are an evidence of dissatisfaction and a fragmenting ofour unified thrust. It is appropriate, therefore, to ask what service anindividual member is looking to get. I am led to believe that the indi-vidual members of NAA want: camaraderie, technical information,training opportunities, assistance for the needy, professional reputa-tion, career contacts, and an improved profession.

It is this set of interests which must be organized and financedyear after year. It is no small task. If you, as a member, found itimpossible to be an active part of last year's Association program,be concerned now with what you can do in the next year to supple-ment field or headquarters efforts. If you, as a chapter officer ordirector, came up a little short in your achievements, take steps nowto regain the lost ground.

It is incumbent upon all of us to identify what we expect the Asso-ciation to do and what we are prepared to contribute to the effort.We need talent, we need ideas, we need enthusiasm! Let us moveforward toward common goals —let us have a unity of purpose —letus be cohesive in optimizing our economic service to the member-ship and to the community.

HERBERT C. KNORTZNAA President, 1985 -86

MANAGEMENTACCOUNTING

(ISSN 0025 -1690)

VOL. LXVII NO. 12 JUNE 1986

official publication of theNational Association of Accountants

Executive DirectorRobert L. Shultis

PUBLISHERJames D. Collier

EDITORErwin S. Koval

MANAGING EDITORRobert F. Randall

TECHNICAL EDITORSusan Jayson

FEATURE EDITORKathy Williams

ASSISTANT EDITORElizabeth Warren

CONTRIBUTING EDITORRobert Half

EDITORIAL ASSISTANTEllen Rose

ADVERTISINGDoryne Gerstein, Manager

Deborah R. Moore, Assistant

CIRCULATIONJoseph Loren, Manager

PRODUCTIONStephen McCrea, ManagerHelen G. Caso, Assistant

ADVERTISING REPRESENTATIVESMontvale, NJ 07645— Doryne Gerstein, NAA,10 Paragon Dr., (201) 573 -6275.

San Jose, CA 95120 —Neal Manning, 6628Tam O'Shanter Or., (408) 997.2929.

Pasadena, CA 91105 —Karin Altonaga.JJH &S, 119 W. Bellevue Dr., (818) 796 -9200.

Montgomery, AL 36104 — Charlotte Bass, theLongshore Group, Inc., 603 Martha Street.(205) 263 -6050.

BPA membership applied forDecember 1985

MANAGEMENT ACCOUNTING (ISSN 0025 -1690) is pub-lished monthly by the National Association of Accountants.10 Paragon Dr., Montvale, N.J., 07645, (201) 573 -9000. Price$6.00 per copy. Subscription rates, per year. $27 (non -de-ductible from dues). nonmembers. $54.00. Second classpostage paid at Montvale. N.J., and additional mailing of-fices. To ensure uninterrupted mail service, send present ad-dress label and new address including ZIP number to Mem-bership Records Dept., NAA, Montvale, N.J.. 07645. Allowsix weeks for change. NAA's telex number is 181 -162: fac-simile number is 201573 -8185. POSTMASTER, Send ad-dress changes to MANAGEMeNT ACCOUNTING, Montvale, N.J..07645 -0433

Copyright 1986 by theNational Association of Accountants


Rates: $2.00 per word, 15 wordminimum. Abbreviat ions, ZIPcodes, and phone numbers countas one word each. All classif iedadvert ising must be prepaid.Non- commissionable.

Closing Date: Deadline for copy isthe first day of the month precedingpublication date.

Classified

WANTED: Adverti sers who wantto reach tho usa nds Of MANAGE-MENT ACCOUNTING decis ion -mak ers for only $2.00 a word.Whether you are buying, sell ing,looking, or hiring, you will be moreeffective On the MANAGEMENT AC-COUNTING Classified page, startingin Augus t .

Copy: All advertising must be sub-mitted in typewritten, double -spaced form. No telephone ordersaccepted.

Box Number: Inquire ClassifiedDept.

Display Classif ied: One- twelfthpage (one column x 2% ") is avail-able at $395.

Payment: Payment in U.S. fundsmust accompany each order. Mailcopy to Doryne Gerstein, MANAGE-MENT ACCOUNTING, 10 ParagonDrive, POB 433, Montvale, NJ07645.

Acceptance: Publisher reservesthe right to accept or reject adver-tisements for MANAGEMENT AC-COUNTING Classified.

Up to 50 words FREE ' to compan-ies that are looking for employeeswho hold CMA certificates and sospecify in advertisement.

' Up to six insertions

OpinionRobert L. Shultis, Executive Director

The Entrepreneurial Instinct IsStill With Us

Receipt recently of some material from theCommission on the Bicentennial of the UnitedStates Constitution sent me back, as a long-time history buff, to one of the nation's first andbest efforts at public relations, The FederalistPapers. These, you will recall, were a series ofsome 85 essays by Alexander Hamilton, JamesMadison, and John Jay, published in newspa-pers in New York City in 1787 and 1788 to con-vince New Yorkers and others to support thesoon -to -be -voted -upon Constitution of the Unit-ed States.

What has this to do with entrepreneurs, ac-countants, and such? Plenty! Whether we re-member or not, the basis for our whole societyand our whole economy rests on a principlepromulgated in the Constitution and reiteratedby the authors of The Federalist. In The Feder-alist No. 12, Hamilton offered the following:"The prosperity of commerce is now percei-ved... to be the most useful as well as themost productive source of national wealth, andhas accordingly become a primary object oftheir political cares." In other words, foster apolitical climate where people can enjoy thefruits of their labors (their property) and theeconomy will grow and the country prosper.

That's been happening to a greater or lesserdegree for the past 200 years. Our founding fa-thers were right. The entrepreneurial instinctwas there then; it is still with us. According to arecent Dun & Bradstreet survey, U.S. business-es plan to create nearly three million new jobsin 1986, two - thirds of which will be with compa-nies employing fewer than 100 workers.

Accountants can certainly participate in thisgrowth. Recently Jack Fox (Washington, D.C.Chapter) paid us a visit. Jack has been anNAAer since the '70s, but one recent claim tofame was his article published in the April 1983issue of MANAGEMENT ACCOUNTING, titled "HowI Started My Own Accounting Business," whichelicited more comment and inquiries from read-ers than any other single article in recent mem-

ory. This article was the genesis for his book,Starting and Building Your Own AccountingBusiness, published by John Wiley. Accoun-tants can join the ranks of entrepreneurs, too.

In addition, they can be a big help to otherentrepreneurs, offering advice and designingan information system adequate to the needsof the owners. That occasion arose recentlywhen two young people opened a new restau-rant in the area. Neither had had any experi-ence with restaurants nor any formal collegeeducation or business training. What they didhave in large measure was ambition, enthusi-asm, and —most importantly —a concept, anidea.

Once the concept was developed — "fondueis fun" —and the location decided upon, thework really began: interior design, review andapprovals, redesign, construction, furniture andappliances, and as opening day approached,menus, pricing, buying, and organizing the sys-tem. Lots of professional skills contributed —lawyers, carpenters, electricians, and, ofcourse, accountants.

How can we as accountants contribute tostart -up businesses? Much depends on the lev-el of sophistication and business expertise ofthe entrepreneurs. In the case referred toabove, the owners were probably typical offirst - timers —long on ideas and short on busi-ness skills and money. The most importantarea where accountants contributed was inplanning and budgeting: nothing very sophisti-cated, but at least a rough breakeven point tosee if the business could be successful andwhen such success might be expected.

Then, there was an accounting and informa-tion system to be developed, with particularemphasis on revenue and cash control. Origi-nally, it was too easy to pay for deliveries out ofthe cash drawer, without keeping an adequaterecord. That made it pretty tough to reconciledaily the cash with the sales checks. After afew weeks, it became important to know whatwas selling best and when it was selling. (Thechocolate fondue, based on a secret recipe,was drawing raves and going great guns withthe after -8:00 p.m. crowd.) Using a PC was anatural here.

All this, of course, is nothing new for an ac-countant. That's what we do and why we exist.It is new for many of our budding business peo-ple as they struggle to succeed in this competi-tive society. What was true 200 years ago whenthe Constitution was in process of developmentis still true today. Thanks partly to the businessclimate it engendered, there is still opportunityfor those who have an idea and the courage

$#69

6 MANAGEMENT ACCOUNTING /JUNE 1986

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Taxes

Israel Blumenfrucht, Editor

Cash Boot ReceivedTreated as Capital Gain

A recent decision of the Tax Court in Clark (86TC No. 10), makes it easier for a taxpayer whoreceives cash "boot" as part of a tax -free reor-ganization to treat the cash received as capitalgain and not as an ordinary dividend.

In the case at hand, NL Corporation acquiredall of the outstanding shares of Basin Surveys,Inc., in a tax -free reorganization from Donald E.Clark, the sole shareholder of Basin. NL offeredClark a choice between 425,000 shares of NLcommon stock and no cash or, a combinationof 300,000 shares of NL common stock and$3,250,000. Clark accepted NL's combinedstock and cash offer in exchange for all the out-standing shares of Basin.

In general, no gain or loss is recognized in anexchange of stock of one corporation solely forstock of another corporation if the exchangeoccurs pursuant to a plan of reorganization.However, there are instances where, in addi-tion to the new securities issued, the Code al-lows for cash or other property ( "boot ") to beissued without affecting the general nature ofthe reorganization. When such boot is re-ceived, gain is recognized up to the value of theboot received. Generally, the gain is consid-ered a cap ital gain, but under Sect ion356(a)(2), an exchange which has the effect ofa dividend is taxable as ordinary income. TheCode provides certain tests for determiningwhether a distribution is considered a dividendor not.

One of these tests, referred to as a "safeharbor" test, can be applied to tax -free reorga-nizations involving cash boot, if the cash re-ceived is considered a redemption of the newsecurities the taxpayer could have received ifhe had not received any cash. The "safe har-bor" test automatically allows a taxpayer re-ceiving a cash distribution in redemption of hisstock to treat any gain as capital gain if: (1) theshareholder's interest in the stock of the corpo-ration after the redemption is less than 80% ofhis interest before the redemption, and (2) after

the redemption the shareholder owns less than50% of the voting stock.

Clark argued that he qualified under this safeharbor test because had he accepted onlystock from NL he would have owned 1.3% ofits outstanding common stock; by acceptingpart cash, his holdings were 0.92% of the totalcommon outstanding. Thus, by accepting thecash instead of the stock and treating the cashdistribution as a redemption of the NL stock,Clark's interest in NL was reduced to only 71 %(from 1.3% to 0.92 %) of what it would havebeen had he received only stock. Coupled withthe fact that he owned less than 50% of NLCorporation's outstanding stock, he satisfiedboth aspects of the safe harbor test and thecash he received must qualify for capital gaintreatment.

The IRS did not disagree that the exchangequalified as a tax -free reorganization. However,it contended that the cash received by Clarkmust be treated as a dividend. In support of itsargument, the IRS pointed to a case decided bythe Fifth Circuit in 1978 in Shimberg (577 F.21D283 (CA -5 1978)) where the court held that theIRS may treat a cash boot distribution in a tax -free reorganization as if it were made by the ac-quired, and not the acquiring, corporation to itsshareholder and thereby negate the ability ofthe taxpayer to use the safe harbor test. TheIRS argued that if this were not done, then in allcases involving factual circumstances similar tothe instant case, in which the "whale" swallowsthe "minnow," the safe harbor test would resultin an automatic capital gain rule. If a sharehold-er in a smal l closely held corporation ex-changes his interest in that corporation forwhat must be, almost by definit ion, a muchsmaller percent of ownership in a large publiclyheld corporation, a comparison of these per-centage ownership figures will always be sodisparate as to qualify as a redemption of stockby the acquiring corporation and will not resultin an ordinary dividend.

The Tax Court, however, rejected the IRS'sargument and supported its conclusion by cit-ing a similar case decided by the Eighth Circuitin 1973 in Wright (482 F.2d 600 (CA -8, 1973))where the court treated boot as a distributionby the acquiring corporation in a hypotheticalredemption of stock that would have been re-ceived if the target shareholder had receivedadditional stock in lieu of cash. Furthermore,the Tax Court stated, "... we think that, on bal-ance, the Wright test is the more suitable vehi-cle for decision principally because its applica-tion produces a result more within the scope ofthe type of reorganization Congress had in

111# 43


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ComputersandAccountingAlfred M. King, Editor

A Super IBM XT Compatible

Product tested: ITT Xtra XP, with 1024K memo-ry, 10 megabyte hard disk, one 360K diskettedrive, color monitor, color card, standard serialand parallel ports. Price as tested, $5,185. Forfurther information, contact: ITT InformationSystems, 2350 Qume Drive, San Jose, Calif.95131, 1 -800- 321 -7661 (in California 1 -800-368- 7300).

When IBM introduced its family of PC com-puters, many other manufacturers jumped onthe bandwagon with similar machines. Most ofthe early compatibles, however, had a fatalflaw. They could not run many of the IBM PCsoftware packages available unless the soft-ware was modified. The marketplace yawned,and no one bought.

ITT profited by being a latecomer to the PCmarket. Using advanced technology, ITT hascreated an IBM PC XT compatible that is fasterthan an IBM AT and that can run virtually all thesoftware available for the XT. I believe the ap-parent ITT strategy is sound because the XT isstill the microcomputer chosen most often forbusiness use.

What distinguishes the ITT Xtra XP from therest of the compatibles? Our firm owns a com-patible advertised as a "clone" of the IBM XT.After testing it, we believe the ITT XP is morecompatible with the XT than our so- called"clone" despite all the technical advances in-corporated into the XP. We tested softwaresuch as Lotus 1 -2 -3, dBase II /III, WordStar,Multimate, the Norton utilities, and DacEasy,TCS client writeup, and Open Systems ac-counting packages. All ran without problem.We did have problems running SideKick andCopy II PC on the XP, but we believe the overallcompatibility with an IBM PC XT is good.

The ITT XP has several advantages. ITT de-signed the XP for performance by using a fasterprocessor (CPU), faster memory, disk caching,

and a print buffer. The CPU can be set to twospeeds, normal and fast, but normal speedwould be used only to run software that is de-pendent on the processor operating at stan-dard speed.

Disk caching is a process whereby part ofmemory is set aside as a disk work area. Then,large blocks of records are read into the diskwork area at one time from the disk drive.When the next record is required by a program,it is read from the disk work area, not the diskdrive. The processing cycle takes less time be-cause accessing the record in the disk workarea is much faster than actually reading it fromthe disk drive.

The documentation provided is outstandingand includes reference cards for commonlyused commands. After no activity for 15 min-utes, the computer will blank the screen, pre-venting screen burnout. Extensive diagnosticroutines are built into the computer, minimizingrepair time.

The computer has been reliable throughoutseveral months of testing. If service is required,one may call the dealer or ITT Servcom, a na-tionwide service network.

We also are aware of one company that usesITT computers as a base for a multiuser, PC-DOS compatible systems.

The keyboard is not suitable for heavy elec-tronic spreadsheet use because the numerickeypad and cursor keys are combined. A Key -tronics 5151 keyboard with these functionsseparated can be purchased as a replacement.

A typical purchaser would buy this machinewith a 20 megabyte hard disk. Backing up thishard disk to 360K floppy disks would take onehour and 55 floppies. I would recommend thatITT use a dual density (360K / 1.2 meg) dis-kette drive as the IBM AT does to alleviate thisbottleneck.

Clarity of text displayed with the standardcolor card was only fair.

The ITT Xtra XP certainly will run ringsaround the IBM XT, but it seems the enhance-ments stop a little short of making it the leaderin its class. I would use the XP when an XTcompatible is needed, and it would be used fre-quently. Then the performance of the XP willpay for the purchase premium.

One note: a Qume 11 /90 letter quality printerwas provided with the computer for review. Wecannot express an opinion on the printer be-cause it was defective. However, there was noattempt by Qume to fix the printer despite notifi-cation. Draw your own conclusion as to Qumeservice and attitude. ElAlvin Dziurzynski, CPA, CDPAccess Systems, Inc., Knoxville, Tenn.


l „ I l e ' f d h t IWe started out looking fora new General Ledgersystem. We came up witha system that's somuchmore: Consco's AIS Ac-counting Information Sys-tem. Only AIS gives us ourdata the way we need it.It lets us tell the systemwhat we look like and whatwe want. It has no limits onfields or field sizes ... whichallows us to put a lot moredata into AIS, and get a lotmore useful informationout. Using its active datadictionary, we have beenable to add informationabout Firestone's cus-tomers and products, thenanalyze this data to findout what is selling, and towhom.

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ManagementAccountingPracticesLouis Bisgay, Editor

MAP Committee Actions Taken

On March 25, NAA's Management AccountingPractices Committee met at the offices of theFinancial Accounting Standards Board in Stam-ford. Before attending to items on the agenda,MAP Committee members heard a report fromMartin Ives, vice chairman of the GovernmentalAccounting Standards Board, on the evolutionand status of the GASB's agenda. In addition,FASB representatives briefed the Committeeon the status of certain FASB projects, includ-ing Accounting for Income Taxes, Accountingfor Stock Compensation Plans, and The Re-porting Entity.

Among other actions, the MAP Committee:

• Approved in principle the proposed State-ment on Management Accounting, "Defini-tion and Measurement of Direct MaterialCost" (MAP, May '86). The Subcommittee onMAP Statement Promulgation will decidewhether input received from external com-mentators warrants change sufficiently sub-stan tive to retu rn the draft to the MAPCommittee.

• Approved a proposed SMA, "Statements onManagement Accounting: Statement of Pur-pose and Operation,,, which explains therole, authority, and developmental processrelat ive to S tatements on ManagementAccounting.

• Agreed to submit letters of comment toGASB on Objectives of Financial Reporting;to AICPA on Reports on the Application ofAccounting Principles; and to IFAC on theImplementation and Enforcement of EthicalRequirements,

Emerging Issues

The FASB's Emerging Issues Task Force wasformed in 1984 to identify and define emergingaccounting issues. From meetings of the Task

Force, the FASB learns whether there is a di-vergence of views on how a particular transac-tion should be reported and obtains insight asto whether (a) additional guidance may beneeded on a timely basis, (b) guidance canawait consideration in an existing FASB pro-ject, or (c) guidance does not appear to beneeded. EITF meetings are open to public ob-servation, and minutes of the meetings, alongwith issue summary packages, are available tothe public.

As of March 1986, the EITF has discussed104 issues. For readers who may be interestedto learn the types of issues that have been cov-ered, here is a summary:

Subject No. of Issues

Income taxes 13Financial institutions 19Financial instruments 23Off- balance sheet financing 10Pensions /employee benefits 5Business combinations 10Inventory/fixed assets /leases 8Real estate 5Other 11

Total 104

Cash Flow Reporting Conclusions

One of the FASB's major agenda projects is"Cash Flow Statements." The Board intends toissue standards that would amend, or replace,APB Opinion 19, "Reporting Changes in Finan-cial Position." At a recent meeting, the Boardreached certain tentative conclusions:

• Investing and financing transactions that donot directly affect cash, currently included instatements of changes in financial position,should be disclosed in a full set of financialstatements, but flexibility may be neededabout whether such disclosures are separatefrom or included within the body of the cashflow statement.

• Guidelines should be established for classify-ing information in cash flow statements intooperating, financing, and investing activities.Interest and taxes would fall under operatingactivities.

• Either the direct or the indirect method of re-porting cash flows would be acceptable.

News Notes

The investigation of the accounting profes-sion by the House Energy and Commerce

0# 43


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NAAResearchPatrick L. Romano, Editor

Advising Small Businesses on Software: Role of the CPA

Significant progress has occurred inthe quantity and quality of microcom-puter accounting software packages.Small business users, however, facea major problem in evaluating theirneed for microcomputer hardware,software, and support requirements.To what extent do accounting firmsprovide this help?

NAA recently surveyed all of itsmembers who are partners with non -Big 8 accounting firms. There were129 usable responses. The surveywas devised with the assistance ofOpen Systems Inc., a leading devel-oper of accounting and business op-erational software for microcomput-ers. The survey's purpose was toidentify accounting services providedby these firms, and to determine theirfirms' involvement in recommendingand providing personal computerhardware and software assistance.

The services offered by the firms asreported in the survey include: 99%provide tax services; 93% providemanagement advisory/consulting ser-vices; 90% offer write -up services;83 %, financial planning, while only25% provide investment counseling.

In regard to microcomputer ac-counting software, 73.5% make rec-ommendations on particular softwareto use. Packages frequently men-tioned were LOTUS 1 -2 -3 by 26%and Open System's software prod-ucts by 14 %. Installation of account-ing software is provided by 38% ofthe respondents; training and supportby 44 %; and 16% perform modifica-tions /customizations to standard soft-ware applications. Eleven percent re-sell accounting software.

When asked how their involvementwill change in the next 12 months,more than three - fourths of the re-spondents noted they believe recom-mendations for accounting softwareto clients will increase:

Typical situations where accountingsoftware recommendations are giveninclude: User purchasing a PC andaccount ing software at the sametime: "Software is most important,hardware capability secondary"(55 %); User purchasing a PC andsoftware at same time: "PC selectionranks over software selection" (21 %);User owns a PC, willing to purchase:"New /additional hardware compati-ble with new accounting software rec-ommended" (3 %).

Important criteria used when rec-ommending or reselling accountingsoftware were ranked as shown in theTable below.

Technical support offered frompublishers of software recommendedor resold includes telephone supportat no charge (61 %), support tools/

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Ease oflearning 79% 20'0 1 + -o —Softwarereliability 76% 22% 24.0

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Userconfidentiality!security 14% 31% 46% 8%


LettersTO T HE EDITOR

Erwin S. Koval, Editor

This department welcomes comments on any topic

of interest affecting the accounting community ingeneral and NAA in particular. Correspondence isnot limited to comments about material previouslypublished in this magazine. Letters cannot be ac-knowledged individually, and the Editor reservesthe right to edit for .space or for other reasons. Allcorrespondence must be signed, but your identitywill be protected tf requested. Address all letters toTire Editor. Management Accounting. Montvale,NJ 07645.0433.

Accounting Education:The Ph.D. `Problem'

I was discouraged by the commentsmade by Dr. McGee in the April issue.Apparently Dr. McGee does not havean appreciation of the advantages to abroad education in developing an ac-counting educator's skills. For example,when teaching accounting, are educa-tors supposed to focus narrowly on thedebits and credits while ignoring therole of accounting in society as a whole?Should our students become numbercrunchers or are we training them to bedecision makers? If debits and creditsare the sole raison d'etre of accounting,I would leave the profession in aminute.

Furthermore, are FASB, NAA,AICPA, and the SEC wrong in con-ducting and sponsoring research? Theconceptual framework clearly states theobjective of accounting is to provide in-formation that is decision useful. Unlessresearchers have taken so- called "irrele-vent" courses in economics, statistics,psychology, and the like, how can theybe competent to determine what infor-mat ion is useful and what issuperfluous?

Finally, as a doctoral candidate, Iwould be offended if my Ph.D. studiesconsisted of glorified trade - school -typecourses. The wide gamut of disciplines Ihave studied has enabled me to gain a

0#19

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How to,

control the M70rIf you've always found foreign affairs less than intrig-

uing, get ready. Now there's an international p4yment systemthat gives you what you've always wanted — ' orld control.

Because it's part paper, there's an au fit trail for quicktraceability and a tangible record of every payffnent made.

Because it's electronically supported ,+ transactions,status inquiries and stop payments can occur at;the speed of light.

The system is WorldLink. And it lets you do thingsyou never imagined possible.

You can issue checks in the world's major trading

currencies without leaving your office. You caft easily payoverseas vendors in their own currencies and r "duce your FXexposure. You can even use the WorldLink PC software tosignificantly reduce transaction errors and the -kissuance time.

And that's just part of the story.If all this makes you wonder how

you ever lived without the WorldLink system,stop wondering. Call Gerald Gualano at CiticorpServices Inc., at 1(312) 380 -5215.

Tell him you want the world on a string.

A better way to move money around the world.CITICORP WORLDLIN(Citicorp Services Inc. ICSI) provides remittance and other services to and on behalf of Citicorp entities. e 1986 CSI. All nghts reserved . World Link is a service mark of Citicorp.


Data Sheet

Robert F. Randall, Editor

More U.S. Firms Borrow Abroad

More and more U.S. companies are using for-eign financial outlets for their external financingneeds, according to a Conference Board study.Reasons: interest rates in international marketsare sometimes significantly lower for U.S. com-panies and foreign sources provide additonalfund - raising alternatives. More than 48% of adiversified group of 108 companies already aretapping foreign financial sources, and manyamong those not currently using foreignsources say they plan to do so in the near fu-ture. Foreign sources now account for 20 %, onthe average, of all the borrowings of 32 compa-nies analyzed in depth. The rapid growth of theEuromarket has been one of the critical factorscontributing to the trend. The report, "Corpo-rate Financing in International Markets," isavailable from the Conference Board, 845 ThirdAve., New York, N.Y. 10022.

Have Software Industry Leaders Failed?

A financial planning expert has accused thesoftware industry of betraying the revolution infinancial planning begun by the developers ofVisiCalc. W.R. Purcell, Jr., founder and presi-dent of X -Y-See Software, Evergreen, Colo.,said: "Today's software gives us easy accessto computer power for crunching and printingfloods of numbers, which is fine clerical help forfinancial people, to use by themselves. But tohelp the 20 million nonfinancial people whomanage most business, what everybody needsmuch more is new ways to set up and deliverfinancial analysis so managers can get and useits real value —so managers can see the finan-cial priorities and the best opportunities andplans and decisions, instead of just floods ofnumbers." Of the small fraction of nonfinancialusers who do use spreadsheets, most do notrealize the real financial planning power —theyuse their spreadsheets only for trivial clericaltasks, such as printing a budget neatly. Mr. Pur-cell spoke at the AICPA Annual IndustryConference.

Wages Replace Energy as Concern

American manufacturers now are more con-cerned with wages and unionization than ener-gy costs, according to the latest survey byGrant Thornton (formerly Alexander Grant &Co.) of general manufacturing climates. Energycosts, which ranked No. 1 every year since1981, have moved to the third position, re-placed by wages, and unionization concernsmoved from No. 3 to No. 2. The complete"Seventh Annual Study of General Manufactur-ing Climates of the 48 Contiguous States ofAmerica" will be released by the Chicago firmthis month.

Business /Accounting Briefs

The widespread shutdown of plants and otherfacilities are causing companies to set up newprograms to ease the pain for dislocated em-ployees, according to a Conference Board sur-vey of 512 companies. Some 59% had to shutdown at least one of their facilities or make sig-nificant cutbacks in their workforces between1982 and the beginning of 1985, and 44% hadto close at least one of their facilities perma-nently. To help displaced employees, compa-nies are offering advance notice, severancepay, extended health -care benefits, and outpla-cement help. More than half the companiesgave three months or more notice; 28% gavesix months or more. Of 79% extending health-care benefits, 49% offered such benefits forfive months or less; 16% offered them for six to11 months; another 12% offered them for oneyear or more. The Conference Board Report(No. 878), "Company Programs to Ease the Im-pact of Shutdowns," is available from theBoard, 845 Th ird Ave. , New York, N.Y.10022.... Paul G. Simpson, a partner of Ernst& Whinney, has been appointed executive di-rector of the Financial Accounting StandardsAdvisory Council. He succeeds Clyde W.Moonie.... For mid - sized, private companieswith annual revenues from $1 million to $50million, a merger or acquisition can take fromnine to 15 months from the time the businessowner has made the emotional decision to selluntil the check is in his hands at the closing.Most of the time is spent in negotiating thestructure, says Geneva Marketing Services, amerger and acquisition services firm in CostaMesa, Calif, .. , Stock options are the mostprevalent type of capital accumulation andlong -term incentive plans among the 500 larg-est industrials, according to a Peat Marwick re-port. Some 446 companies (89 %) used this in-centive in 1985.


Managing Your CareerRobert Half, Contributing Editor

How to Tell the Boss the Bad News

I was burned in my last job as aninternal auditor because I was toofree in expressing myself to myboss. I never hesitated to bring himbad news, and it backfired. Insteadof thanking me, he viewed me notonly as the carrier of the bad news,but as the cause of it. I eventuallyresigned and have now started anew job. My new boss seems to beopen to a free exchange of ideasand information, but after my lastexperience I'm definitely gunshy.Any guidelines on what to tell aboss, and what to hold back?

The question of how best to keep asuperior informed is a universal one.Any answers must take into account avariety of intangibles that only theperson on the scene can make judg-ments about.

Of course, an effective managerencourages employees to bring in thebad news, and to do it fast before thesituation gets worse. It sounds asthough your previous employer want-ed only to hear happy, upbeat news.

Like so many things in life, timing iscrucial in this situation. I certainlywouldn't decide to break bad news tomy employer at quitting time on Fri-day, or first thing in the morning, andprobably not just before lunch. If a sit-uation is critical and demands imme-diate action, any time will do, but mostproblems aren't so acute that somejudicious thinking about when to bringthem up isn't in order.

A decision also has to be made asto how important the news really is,and whether it's the sort of problemthat your particular employer wouldwant to be consulted on. Your newsuperior might be the sort of personwho expects his people to solve prob-

lems, rather than air them. On theother hand, there are executives whoenjoy getting involved with every de-tail. This really gets to the heart of thematter. It isn't so much limning strate-gies for passing on bad news as it isdeveloping an overall strategy forkeeping a superior informed on alllevels. That depends, to a great ex-tent, on coming up with a reasonedevaluation of your superior's person-ality and managerial style, as well asestablishing a more formal system ofcommunication to satisfy his or herneeds, as well as the needs of the de-partment, and company.

Before going to your boss with aproblem (or any piece of information),subject it to some evaluation. Is itsomething that might have a direct ef-fect on your boss's job or reputation?If so, don't delay. Is it potential badnews that will negatively impact uponyou? Again, if the answer is "yes,"don't hesitate to provide your bosswith some advance warning. Is itsomething that would benefit fromyour boss's expertise? That's worthbringing up, provided you've exhaust-ed your own areas of knowledge andexperience. No boss wants to becalled upon to solve problems forwhich he or she is paying you goodmoney to handle.

Too many younger managers, inse-cure in their positions, have a needconstantly to touch base with theboss which, after awhile, can be an-noying. I'm a believer in using writtennotes to pass along items of interest,nothing long and formal, just a line ortwo for the boss to glance at. It takesfar less time than a conversation, andleaves the busy executive free to dealwith the subject of the note at his orher convenience.

I'd suggest that you pick an oppor-tune moment to sit down with yourboss to discuss general guidelines forcommunication between you two. It'simportant, especially in light of yourprevious experience, that you set upparameters with which you are com-forable, and unless you establish, inyour own mind, a clear -cut set ofrules, you might find yourself in thesame predicament as in your previousjob.

It would also benefit you, I think, totry and take a long, hard look at yourprevious communication difficulties.Sometimes, this sort of problem isonly symptomatic of an underlying dif-ficulty in the relationship betweenmanager and superior. If that's thecase (and it will take honesty withyourself to determine it), your discus-sions with your boss might have to beexpanded to include a broader rangeof issues, including your responsibil-ities, performance, and other aspectsof your job in which communicationplays only a part.

In the meantime, don't hesitate tocome forward with bad news that yourboss should be aware of. There arefew successful executives aroundwho deal only with happy news, andI'd be surprised if you have ended upwith two in a row. El

Robert Half is the author of RobertHalf on Hiring. He heads Robert HalfInternational, Inc., which specializesin financial and EDP jobs.

17A,VA, ; Ekrl

"Yes, R. Y, there is a reason why Isent you a book with chapter eleven

torn out!"


Letters

1 5 0finer appreciation of the important roleof the accounting profession.

It is exciting to realize that we areproviding a means of more efficiently al-locating our society's resources. Cer-tain ly, at times, the doctoral levelcourses seem impossible, but as RobertBrowning once wrote, "A man's reachshould exceed his grasp." If we heedDr. McGee's advice, the return of themyth of the "green eyeshade accoun-tant" is inevitable!

Jeffrey R. Cohen, CMA, MBAInstructor, Boston College

Granby, Mass.

We Support Our Software

We take exception to the review pub-lished (Jan. '86) about BPI Systems ac-counting software. The quality of thisreview was not consistent with other re-views of accounting software publishedin your special supplement.

We are, however, amendable to con-structive criticism. We have been awareof difficulties that our customers havehad in reaching us during peak hours ofthe business day, and are in the processof increasing access by providing addi-tional telephone lines and implementingan electronic access system.

In response to the reviewer's com-ment regarding the warranty providedon the out side of our packages , heshould be aware that the wording of thiswarranty is standard throughout ac-counting software packages.

This warranty does not mean that wedo not support our software. Upon re-ceipt of registration, each user is enti-tled to 90 days of free, toll -free tele-phone support. We have an experiencedstaff of technical support analysts, and aproduct support staff whose sole pur-pose is to maintain our software.

Gerald M. BaldwinVice President Sales /Marketing

BPI SystemsAustin, Texas

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Womenin Management Accounting:

'IMoving Up...S�•1•o•w•1•y

l i e 'women c-0 e su CG.esSfUl

, ro grave thatfallen psi;� t is a c Man it' B

rTagers' Mas

rna Assistant

F P - ' '!fiffi,

By Susan Jayson and Kathy Williams

How successful are women working in the field ofmanagement accounting? Are they satisfied withtheir profession? Do they expect to occupy posi-tions in senior management?

To answer these questions, MANAGEMENT AC-COUNTING editors surveyed 500 of NAA's femalemembers who hold the position of manager, con-troller, treasurer, chief financial officer, chief ex-ecutive officer, and president /owner.

Today more women than ever are attracted tothe career opportunities in accounting and fi-nance. A recent survey by the AICPA disclosedthe percentage of female accounting graduateswith bachelor's and master's degrees has increasedfrom 28% in 1976 -77 to 49% in 1985 -86. AtNAA, women now account for approximately30% of the Association's total membership. Oursurvey represents NAA's first effort in document-ing this exciting new trend.

Our study revealed that 69% of the women arein the 31 to 50 age group —the peak managerialand earning years for executives. They tend towork in manufacturing, service, and financial in-dustries. (See Figures 1 and 2.)

Most are married, and almost half are mothers.The compensation they receive for the substantial-ly more than 40 hours per week they work is goodbut not extravagant -42% earn $40,000 or moreper year. This compares favorably with whatmembers of the American Woman's Society ofCPAs earn. According to a recent survey theAWSCPA conducted, 27.7% earn $40,000 ormore annually.

Only 32% of our respondents have an account-ing certificate (CPA, CMA, or CIA), and approx-imately 85% of all certificate holders are 40 yearsold or younger. Eighty percent have baccalaureatedegrees or higher.

Ì Love My Work!'

Women in management accounting are optimis-tic that their goals are attainable through extra ef-fort. An assistant controller working in the con-struction industry wrote: "I can go as far as Iwant to, although I still have to work harder thanmy male colleagues to get there."

As women management accountants advanceup the corporate ladder they are enjoying manypersonal and professional rewards. In fact, morerespondents mentioned the positive and satisfyingaspects of their job rather than the problems facedin their career.

Bonuses and good salaries are considered im-portant rewards. At every job level, however,women view the opportunity to work in a chal-lenging environment, status in the profession, re-spect from senior management, being part of a de-

Women in Management Accounting

56%Theirpreviouspositions...

22%.

14%

6%

2%

Clerk/ Stall Manager Controllers CFOBookkeeper

4 2 0/o4000

Positionstheynowhold. . .

14%

4%

Manager Controller/ CFO Presitlenl!Treasurer Company Owner

Where38% they

expectto bein 5 years...

25%

16%

13%

8%

Manager Controller/ CFO Company Don'tTreasurer OwneNCEC) Knnv,


vision- making team, and being in a position toinfluence the growth and development of the peo-ple they supervise as important also.

"The expanding responsibilities of my job, theopportunity to play the role of mentor to the peo-ple I supervise, and the realization that my suc-cess in a conservative company is based solely onmy abilities and achievements is gratifying," ex-plained Linda Nellis, general accounting manager.

A CPA and manager of financial reportingearning more than $40,000 per year happily re-ported: "The pay is high enough to travel andown a home. At work I have the freedom to makedecisions and help initiate changes."

"Being with a company that has grown and be-

an advisor (52% vs. 36% vs. 30 %). Usually theadvisor is a male. As CFO, Judith L. Englundcommented, "I couldn't have made it this far inthe organization without the support of the ownerwho is male. Women still need men's support."About half the president /owners had an advisorduring their career, most of whom were male, and90% now help other women, mainly through on-the-job opportunities and some career counseling.

In addition to long hours spent at the office,women in management accounting participate inoutside activities that they believe will help themto advance in their careers. CFOs, controllers, andmanagers report that continuing their education isthe number one outside activity, followed by pro-

Women in management accounting are optimistic that if they workhard enough they will achieve their career goals.

ing a part of its growth is exciting," reports thetreasurer of a medium -size manufacturer.

Getting Ahead

According to the survey, in the next five years13% see themselves remaining in a management -level position. More than 60% expect to be corpo-rate controllers, treasurers, and chief financial of-ficers. Eight percent have ambitions to be a CEOor company owner.

To help them achieve their career goals, moreCFOs than managers or controllers have or had

Growth of FemaleMembership in NAA

30%

11%

6%

4%

2%

1967 1974 1977 1981 1985

fessional affiliations and membership in a wom-en's organization. Slightly more CFOs than man-agers are involved in these activities (86% vs.76 %), and controllers rank third (67 %). Compa-ny owners, however, place professional affiliationsfirst.

The company owners have worked hard toreach the point where they are on their own andcan be their own boss. "I enjoy the responsibility,challenge, flexibility, and recognition," says Kath-erine Westover from Neenah, Wis., who puts inabout 75 hours a week as president of a smallwholesale /retail company and who previously hasbeen a staff accountant and a corporate controller.Sally Ann Parks, owner of a personnel agency inWaterville, Maine, for eight years, agrees. "It 'sgreat being able to manage my own company,"she says. Most of the respondents in this categoryheld various financial positions such as manager,auditor, accounting manager, vice president, gen-eral manager, or controller before reaching theirgoal as president, owner, or partner.

If they own their company, their main goal is toexpand, and no one wants to leave her current job.If she could be tempted to change, it would be tofurther career goals or earn more money. A whop-ping 82% of this category would choose the samecareer path. Only one would not, and one isundecided.

Although they are content now, their careershave not been without problems. Take AnaPrince, for example. She has owned a companyfor about a year. This is her second business; shehad owned another company for 15 years, endingin 1972, and has made a couple of changes in thelast five years. She's delighted with her success


now, but recalls she "was asked to type and takeshorthand with her master's degree and men werenot, even with an associate degree." Mrs. Prince,incidentally, holds three college degrees in addi-tion to her master's in accounting.

Kate Farley Moynahan, owner of a financialservices business for the past seven years, and whohas been in accounting for 14 years, notes: "Iworked for an insurance company and was openlydiscriminated against. I left the job because thesituation was intolerable." She also says that, inhindsight, "I would have been stronger and moreassertive during my first five to ten years in busi-ness." Now she serves as a mentor to o therwomen.

Jean Barnett, a 30 -year veteran of the businessworld, has been president of a small computer in-stallation /sales /support company for the past fiveyears that she considers "a progressive group"that accepted her on merit. Previously she "wasnot always accepted as part of the team when oth-

er women managers were not present."One management consultant and owner of her

own firm who has been in accounting more than20 years and self - employed for eight remarked,"There was no work in my small southern townfor women in management eight years ago so Ihad to open my own business. I still have to out-perform men to be accepted."

On the other side, Judy Thompson, president ofan executive search firm in San Diego for nineyears, says she has experienced no career prob-lems: "I've never accepted sex as being a reasonfor discrimination against me."

Anne C. Ransdell, controller of a printing com-pany and nominee for NAA vice president, notes:"If I as a woman had been given the opportunitieswomen are today when I began working forNASA in 1945, I would be at the top of the corpo-rate ladder in a Fortune 500 now. I worked veryhard to be where I am today."

Fair and Equal Treatment

How do women view the work performed bytheir male colleagues, and do they believe theyhave the same chances as their male counterpartsfor advancement within the company they workfor? Their opinions depend on what job they nowhold in the corporate hierarchy.

When asked whether they spent the sameamount of time as their male counterpart did inpreparing for his career, the CFOs overwhelming-ly (86 %) reported that they spent the sameamount of time as the men. More than half theother groups agree, but a significant percentagebelieve that they have devoted more effort to pre-paring for their career.

When asked if they put the same amount of ef-fort into their work as their male colleagues do,


Figure 1Profile of Women in Management Account ing

Marital StatusMarried 640/6Divorced 15%

Single 16%

Widowed = 5%

Age20 - 30 Years Old 23%

31 - 40 48 ° -b41 - 50 21%

51 + _ 8%

ChildrenYes 48%

No 52%

EducationBachelor's in BusinessAdministration (BBA) 46%

MBA 17%

Bachelor of Arts (BA) 15%

High School 13%Associate Degrees - 7%

Master's in Accounting , 2%

Ph.D Degree (less than 1%)

Certi f icates

None 68%CPA 29%

CMA , 3%

the groups differed. While managers (57 %) andcontrollers (55 %) believe they work harder thanmen, the same percentage of presidents and CFOssay that it's an equal amount of effort.

When it comes to opportunities for advance-ment, managers are more pessimistic than theCFOs. Almost half (46 %) of the managers believethey don't have the same chance for promotion asthe men do, and 17% are uncertain.

More CFOs are optimistic that gender hasnothing to do with advancement, but 57% eitherdon't believe they have the same opportunities asmen or don't know. Sixty -five percent of the con-trollers, however, beli eve they have the samechances to advance.

According to Linda Ellis, "Opportunities have

23

increased at the middle management level, but ac-cess to upper management seems to be almost asrestricted as ever."

I Quit!

Instances of discrimination or sexual harrass-ment were noted. A concern for many respon-

Figure 2Career Profil e

Industry They Work In:

Manufacturing 31 q%Service - , 15%

Financial 14 0/0

Wholesale/Retail 9%

Transportation/Utilities/ 6 0/b

CommunicationsNonprofit 59.0

Construction 41/o

Public ■ 300AccountingOther

-

13%

Number of People They Supervise:Less than Five 36%

5-

10 37 0/o11

-

20 17%

20 + 9 %

No Response 1 1%

Size of Organization:Small: Annual Revenues less than $20 million 47%

Medium: Annual Revenues $20 mill ion-

$100 million 28%

Large: Annual Revenues $100 million + 24%

No response 1%

How Much They Earn Each Year:$20,000

-

29,999 23%

30,000-

39,999 34"o

40,000-

49,999 2 2 Q o

Over $50,000 20 0/0

No Response ' 1 0/ 0

Hours Worked Each Week:20

-

39 _ 5%

40 - 4 5 41%

46 + 54%

dents was denial of a deserved promotion and un-cer ta in ty as to how far up the corporate ladderthey could advance. For example, a highly paidcontroller was passed over for a promotion andafter pursuing the reason in -house filed discrimi-nation charges. The manager involved was fired,and she has moved up.

Francine M. Gaie , manager of an accountingdepartment, said: " I was earning less than mymale counterpart who had the same responsibil-ities as I did. After confronting management I waspromised equal pay. I achieved parity in threeyears."

Although the women surveyed believe that pro-gress has been made in eliminating the stereotypi-cal perceptions of women in business, they alsobelieve it sti ll exists to some degree in corporateAmerica. Judith Englund, a CFO of a civil engi-neering firm, reported that "male managers don'thave as much confidence in my financial judg-ment as I think they would have in a man. I amleft out of telephone discussions involving majordecisions."

A manager of internal audit who also is a certi-fied internal auditor told of her di fficult ies inproving to the male vice presidents that she is ca-pable and qualified to handle the company's audit."Wha t makes my work more d i ffi cul t a t e themany sexist remarks that often are made duringclos ing meet ings when eve r yon e is feel ingpressured."

A controller notes, "Even though I have beencontroller three years, I am still referred to bysome people (including the owner on occasion) asa bookkeeper." Two others reveal: "Women arestill stereotyped as secretaries or bookkeepers,"and "management thinks women make wonderfulclerks but nothing else!"

How are women coping with these problems?Some quit . Others discuss the problems with se-nior management or ignore the situation, hopingthat performing their responsibilities in a profes-sional manner will resolve the problem.

"The biggest opposit ion to women in manage-ment accounting are men in their 40s and 50s,"said Michaela I. Thompson, cost accounting man-ager. "I was in a job where I could not advanceany further than a cost accounting manager. Thereason or most of the reason was that I was awoman —I changed jobs," she said.

A CPA and financial analyst reported that shewas her superior 's "litt le girl." "We discussed theproblem and I tried to be more professional —inother words, more masculine," she said.

A small minority were irritated that womenthemselves are overly concerned with the issue ofdiscrimination. "I think women seldom encounterproblems with male employees unless they're

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Women Accountants—Do They Earn asMuch as Men?

A woman in the account ing profess ion earns a lmost $4,000less each yea r than her ma le counterpar t .She a lso makes more persona l sacr ifices .

By J oseph i ne E . O l son

an d I r en e H ans on Fr ieze

The number of women in the accounting profes-sion and the number of women with MBA degreeshave both increased dramatically in the last 13years. But are these career women reaching thesame level in the corporate hierarchy, earning thesame income, and enjoying the same job satisfac-tion as their male counterparts?

Recently, we examined both the star t ing andcurrent pos i t ions of MBA graduates from theUniversity of Pittsburgh whose first job was in ac-counting. We found that the men and women be-gin their careers holding similar positions and atthe same salary level. A few years later, however,men were earning significantly more. Women alsoreport being less satisfied wi th the ir work andshow indications of having made more family sac-rifices for their work.

MBAs Surveyed

In the spring of 1984, a questionnaire was sent

to 2,047 University of Pittsburgh graduates fromyears 1973 to 1982.' After two follow -up mailingswe received 1,428 questionnaires, giving us a re-sponse rate of 70 %. For our study, we selected the205 students (130 men and 75 women) from thefull -t ime MBA program who reported that theirfirst post -MBA position was in accounting.

The women accountants we surveyed were verysimilar to their male counterparts in educationalbackground. About two th i rds of the men andwomen concentrated in accounting in the MBAprogram and almost al l of the remaining gradu-ates studied finance. Most had undergraduate de-grees in economics or business. More of the wom-en had some prior full -time work experience thanthe men (63% vs. 43 %). However, the men weresomewhat more likely to have had prior account-ing experi ence than the women (25% vs. 15 %).Few of ei ther the men or women previously hadworked in public accounting.

The First Job

To get an accurate picture of how the careers ofwomen MBAs compare wi th men MBAs in ac-

Josephine E. Olson isan associate professorof businessadministration andeconomics at theUniversity ofPittsburgh. Shereceived her Ph.D.degree from BrownUniversity.


Irene Hanson Frieze isa professor of

psychology andbusiness

administration at theUniversity of

Pittsburgh. She earnedher Ph.D. degree at

UCLA.

counting, we first looked at the entry level posi-tions ofour respondents. All 205 MBAs took full -time jobs. As Table 1 indicates, more than half thegroup took posi tions with public accountingfirms. The remainder took managerial accountingor internal auditing positions. A significantly larg-er percentage ofwomen than men took positionswith commercial banks while proportionally moremen were in public accounting. Both 57% of themen and 57% of the women took their first posi-tion in the Pittsburgh area.

Were there gender differences in starting salaryfor these MBAs in accounting positions? To an-swer this question requires controlling for the year

Figure 1Current Job Levels

All 192 whose first post -MBA position was in accounting

Professional Middle Senior(entry level) management management

f '6 respondents who remained in accounting positions

Professional Middle Senior(entry level) management management

in which the person entered the job market andthe amount of work experience prior to earningthe MBA degree. We used regression analysis,and found that there was no effect for sex or foryears of prior work experience.' The regressionshowed that only the year ofgraduation related tosalary, with average starting salaries increasingabout $1,000 per year.' (The average starting sala-ry for these MBAs ranged from $12,600 in 1973to $21,500 in 1982.)Therefore, we can concludethat gender did not affect starting salary.

We next considered whether the type of indus-try in which the MBA graduate did accountingwork affected salary. Because public accountingand banking differed in the proportion ofmen andwomen, we looked at whether working in these in-dustries had an impact on starting salary. Using aregression analysis we found that being in eitherthe more male- dominated area ofpublic account-ing or the relatively more female area ofbankingtended to lower one's starting salary, regardless ofsex.' Having a starting position in public account-ing tended to lower starting salary about $1,400and a starting position in banking tended to lowerit about $1,100. Again, sex had no effect. For eachyear after one received the MBA, the starting sal-aries in accounting increased about $1,000.

Although we found no gender difference in thestarting salaries ofaccounting positions, it shouldbe noted that an earlier study we participated indetermined that accounting positions pay signifi-cantly lower starting salaries than finance, plan-ning, product ion , or general managementpositions.

We also examined the level at which theseMBA accountants entered the corporate hierar-chy. Four categories are identified senior man-agement (includes partner or vice president andabove), middle management, and professional.Except for five MBAs (four women and one man)who entered at the middle management level, allentered accounting positions at the professionallevel.

In sum, salary differences do exist depending onthe industry the MBA accountant worked in, butotherwise the starting salaries and job levels ofthese men and women appear to be comparable.

Women Earn Less

Looking first at the overall career paths ofourMBAs, we find that women were more likely thanmen to have been unemployed at some point sincereceiving the MBA degree. The women also weremore likely to work part -time or to have workedpart -time earlier. However, nearly one quarter ofthe men also had experienced some unemploy-ment or part-time work. Considerably less thanhalf of both men and women worked in the Pitts-burgh area by 1984.Because part -time work tends


to be of a dttterent na►uic, we only considered the192 people (129 men and 63 women) who hadfull -time jobs at the time of our survey.

Table 1 provides a brief profile of those MBAswho started their career in accounting and wereemployed full -time as of the beginning of 1984.The average age for both men and women was 31,and they averaged eight years of total full-timework experience. However, the men worked moreyears following graduation while the womenworked more years before earning the MBA (typi-cally in a nonaccounting area). Thus, the menhave more relevant work experience.

More substantial differences are seen in the per-sonal data for the men and women. Despite thefact that the average age of the men and women isthe same and that women traditionally marry at ayounger age, a significantly smaller percentage ofthe women are married. Of the men and womenwho are or have been married, the men have morechildren. Thus, it seems that women are morelikely to delay having children or not have themat all.

A closer look at their career paths (Table 1) in-dicates that only 86, or less than half of those whostarted in accounting positions, still remain in po-sitions with "accounting" in the title. The mostcommon move for both men and women is intopositions with "financial" in the job title, withwomen being even more likely to make this movethan men. Another difference is the fact that 17(or 13 %) of the males have moved into generalmanagement positions, but only one female hasdone so. These general management positionstend to be at higher levels-in the corporate hierar-chy than any of the other job areas.

Table 2 shows a significant move out of publicaccounting. Only about one -third of the men andone -fifth of the women originally in public ac-counting remain in the field and some of thosewho do remain are no longer in accounting posi-tions. Percentages in banking are similar for theoriginal and the current jobs, possibly suggestingthere is less turnover in banking. Women continueto be significantly over represented in banking.Other industries show increases, presumably re-flecting the movement into these industries frompublic accounting.

Given these differences in the types of positionsheld by the men and women in 1984, we thenasked whether there would now be significant dif-ferences in job levels and salaries for men andwomen. Figure 1 shows the job levels in the cor-porate hierarchy for those 86 MBAs still in ac-counting positions and for the 192 MBAs whostarted out in accounting. Males and females ap-pear to have been equally successful despite thesex differences in general management positions.By the time of the survey, about 9% of both the

Table 1Profile of MBAs in Accounting

Age, marriage, and workMen Women

Average Age 30.9 31.0

Percent Currently Married' 73% 52%

Average Number of Childrenfor Those Ever Married' 1.0 0.6

Average Years of Full -timeWork Before MBA! 1.1 2.4

Average Years of Full -timeWork After MBA' 6.8 5.5

Average Total of Years ofFull-time Work 7.9 7.9

Percent Currently Workingin Pittsburgh Area 38% 400 0

Their first joke

Industry Men Women Total

Public Accounting 74 35 109(57 %) (47 %) (53 %)

Banking' 12 16 28(9 %) (21 %) (14 %)

Other Services 18 9 27(14 %) (12 %) (13 %)

Manufacturing, Mining, 26 15 41and Construction (21 %) (20 %) (20%)

Total 130 75 205

What they do today.JobArea Men Women Total

General Management 17 1 18(13 %) (10/0) (9%)

Accounting 62 24 86(48%) (38%) (45%)

Finance 22 22 44(17%) (33%) (23 %)

Other Business Functions 25 13 38(19%) (21%) (20 %)

Other Professions 3 3 6(2 %) (5%) (3 %)

Total 129 63 192

'Sex dif ference is statistically significant at the 95% confidence level.#All respondents (192) who were working full -time when the survey was taken and

whose f irst post -MBA position was in accounting.

men and the women in the overall group of 192had achieved senior management (as we define it)but no one in the sample was yet a partner in anaccounting firm. Thirty -six percent of the menand 41% of the women were in middle manage-ment. The table also indicates that the higher -lev-el positions are less likely to have "accounting" inthe job title and those 86 respondents who re-mained in accounting positions did not rise ashigh as the group as a whole. Thus, our rathersimplistic measure of position in the corporate hi-erarchy indicates that women were doing as well

as men.Perhaps a more relevant measure of career suc-

cess is income. Here we do find sex differences.The average 1983 salary for the men was $40,600,

MANAGEMENT ACCOUNTING/JUNE 1986 29

Table 2Current Industry Breakdown

The first post -MBA Remained in Accountingposition was in accounting Positions

(Total: 192) (Total: 86)

Men Women Men Women

Public Accounting 25 7 18 5(19 %) (11 %) (29 %) (21 %)

Banking' 13 17 2 4(10 %) (27 %) (3 %) (17 %)

Other Services 43 16 22 8(33 %) (25 %) (35 %) (33 %)

Manufacturing, 45 19 19 6Mining and (35%) (30 %) (31 %) (25 %)Construction

No Codable 3 4 1 1Response (2 %) (6 %) (2 %) (4 %)

Total 129 63 62 24

'Sex difference is statistically significant at the 95% confidence level.

while women averaged only $34,200.The differ-ences were less for those 86 still in strictly ac-counting positions($33,800for men and $29,300),and both sexes had lower incomes than those whohad moved out of accounting.

Although these MBA women were averaging$6,000 less than the men (a statistically significant

Table 3How MBAs Feel About Their Jobs

The first post -MBAposition was Remained inin accounting accounting positions

(Total: 192) (Total: 86)

Men Women Men Women

How Successful do you feelyou have been with yourpresent company ?' 4.0 4.1 4.1 4.0

Overall, how satsified ordissatisfied are you withyour present position? 2 4.0 3.7 3.8 3.6

1 am given a chance to dothe things I do best.3 3.4 3.2 3.2 3.0

The pay is good . 3 3.2 3.0 2.9 2.8

The people I work with takea personal interest in me.3 3.2 3.2 3.1 3.0

My supervisor is successfulin getting people to worktogether.3 3.04 2.8# 3.0' 2.4'

Promotions are handledfairly.3 3.1 ' 2.7 3.1' 2.5'

Percent who reported theyhave experienced someform of discrimination intheir work. 17 %- 41 %' 15 %- 44 %*

1. Scale ranges from (1) 'very unsuccessful" to (5) 'very successful"2. Scale ranges from (1) 'very dissatisfied" to (5) 'very satisfied"3. Scale ranges from (1) "not at all true" to (4 ) 'very true"

' Sex difference is statistically significant at the 95% confidence level.# Sex difference is marginally significant at the 90% confidence level.

difference), these simple average differences canbe misleading. As with starting salaries, currentsalaries may be affected by years of work experi-ence, type of industry, job level, and the like.Thus, we again used multiple regression analysisto test whether there were still sex differenceswhen these other factors were considered. Ourfirst analysis showed that even when controllingfor work experience and starting salaries, womenearned less than men.5

Starting salary also was an important determi-nant of later income. Those who started out at ahigher salary continued to earn more. Controllingfor all these factors, it appears that every thou-sand dollars of starting salary raises current salaryby almost an equal amount. Thus, it is clearly inone's best interest to negotiate as high a startingsalary as possible. Furthermore, every additionalyear of full -time work experience tends to raiseone's current salary by almost $4,000. Prior workexperience seems to have a positive impact on cur-rent salary even after we control for star tingsalary.

While all of these are positive factors, we alsofound some things that reduce income. Being awomen seems to reduce annual income by almost$4,000even when controlling for work experienceand other factors. Because this sex difference wasnot obvious in starting salaries, it appears thatwomen were either not getting the same raises astheir male colleagues or were not being promotedinto higher - paying positions.

In order to further investigate what might becausing these sex differences in income, we nextconsidered whether industry, job level, and work-ing in a position with "accounting" in the job titlehad any additional impact on income and the sexdifferential.' Our results indicate that even con-trolling for job area and industry, women contin-ued to earn about $4,000 less in yearly income.For both men and women, those remaining in ac-counting positions also earned less. Working inbanking or public accounting did not have a sig-nificant impact on income. A senior -level positionraised the MBA's salary by about $18,000 but amiddle management position did not significantlydifferentiate salary from the professional position.Thus, two - thirds of the sex difference in averagecurrent salaries cannot be explained by differencesin work experience and type of job.

Do Women Enjoy Their Work?

Women with careers in accounting tend to startout at the same level as the men but they fall be-hind in terms of income after a few years on thejob. At the same t ime, the women have mademore personal sacrifices.

We asked MBAs if they believed they were suc-cessful and if they derived satisfaction from their


wo r k . O n t h e a v e r a g e , b o t h me n a n d wo me n f e e l

su c c e s s fu l a nd a re s a ti s f i e d wi t h t hei r j o b s (T a b l e

3). Ho we v er , i n a ll bu t o ne ca se , t he fe mal e s ' a v er -

age s co re s a re le ss po s i t iv e t ha n t he ma le s ' , p ar t ic -

ul a r l y wi t h r e s p ec t t o s u p e rv i s o r s a nd p ro mo ti o ns .

W o m e n a re less likely to t hi nk t he i r s u p e rv i s o r

s u c c e e d s i n g e t t i ng p e o p l e t o w o r k t o ge t h e r a nd

t h e y d o no t a gre e a s mu c h tha t p r o m o t i o n s a r e

ha nd l e d f a i r l y . T hu s , i t s e e ms t ha t wo me n a re no t

to t a l l y p l ea s e d wit h the ir j ob s , e s pe c ia l l y t ho s e 24w o m e n w h o h a v e r e m a i n e d i n a c c o u n t i n g

pos it ions .

T hi s d i s c o nt e nt a l s o is re f l e c t e d i n t he i r v i e ws

a b o u t d i s c r i m i n a t i o n . W e a s k e d t h e q u e s t i o n

" H a v e you ev e r e xp e r i e nc e d a ny fo rm o f d i sc r i mi -

nat io n in y ou r wo rk ? " , and ov er 40% of t h e wo m-

e n s a i d t he y f e l t t ha t t he y ha d b e e n d i s c r i mi na t e d

a ga i ns t , t y p i c a l l y b e c a u s e t he y we re wo me n. Le s s

t ha n 20% of t he me n r e p o r t e d d i s c r i m i na t i o n a nd

t he i r e xp l a na t i o ns of t he t y p e s o f d i s c r i m i na t i o n

we re mo re v a r i e d , r a n gi ng f r o m re v e r s e d i s c r i mi -

na t i o n a g a i n s t w h i t e ma l e s t o d i s c r i m i n a t i o n

b a s e d o n ne p o t i s m.

Equality for Women Accountants

Mo r e a n d m o r e wo me n a re e nt e r i ng t he ac -

c o u nt i ng p ro fe s s i o n wi t h t he i nt e nt i o n of p u r s u i ng

a li fe - lo ng c aree r and hi gh - le ve l ma na ge me nt posi-t i o ns ; t here fo re , i s s u e s s u r rou nd i ng t he p o s it i o n ofwo me n i n a c c o u nt i ng wi l l b e of i nc re a s i ng i mp o r -

t a n c e t o m a na ge me n t a c c o u nt a nt s i n t he y e a r s t o

c o me . O u r s t u d y i nd i c a t e s t ha t ma l e a n d f e m a l e

MBAs b e g i n o n a n e q u a l fo o t i ng, b u t t he wo m e n

lo s e gro u nd o v e r t i me wi t h r e s p e c t t o i nc o me . A l -

thou gh o ur s i mp le j ob - le v el c at egor ie s d o no t indi -

ca t e s e x d i f f e r e nc e s , t he f a c t t ha t a l mo s t no wo m-

e n ha v e mo v e d i nt o ge ne r a l ma na ge me n t p o s i t i o ns

ma y ind i c a t e t ha t the y a re no t ge t t i ng i nt o t he

tr a c k s t ha t l e a d t o t o p ma na ge me nt . O u r d a t a a l s o

s u gg e s t t h a t m a n y of t h e s e w o m e n M B A s i n a c -

c o u nt i ng b e l i e v e t he y a r e no t b e i ng t r e a t e d f a i r l y

wi t h r e s pe c t t o pro mo t i o ns a nd f e el t ha t the y ha v e

b e e n d i s c r i m i na t e d a ga i n s t a s wo me n.

T e n yea rs a go it mi g ht ha v e be en e n o u gh to

s h o w w o m e n t h a t t h e y h a d e q u a l e nt r y i nt o t h e

pro fes s io n. Now t ha t t he y a p p a r e n t l y ha v e e q u a l

e nt ry , t he y a l s o wa nt t he e q u a l o p p o r t u ni t y t o a d -

v a nc e in s a l a ry a nd r a nk . O u r s t u d y s u g ge s t s t ha t

this eq ua l it y is no t ye t the ca s e ; ho we v e r, i t r a is e s

mo re q u e s t i o ns t ha n it ans we r s . A r e o u r resu lts

p e c u l i a r t o t h e Uni v e r s i t y of P i t t s b u rg h o r t o

M B A s ? If no t , w h y d o w o m e n i n a c c o u n t i n g

ma k e l e s s t h a n me n ? Do t he y ge t f e w e r p r o m o -

t i o ns ? A r e t he y c h a nne l e d i nt o d e a d - e nd t r a c k s ?

A r e t he y less likely to ha v e a he l p fu l me nt o r ?

Do e s ge nde r af f e ct j ob p er fo rma nce o r e v al u a ti o n?

W e h o p e o u r fi nd i ngs will s t i mu l a t e fu r t h e r re-

s e a r c h b y ma na g e m e n t a c c o u n t a n t s o n t he s e i m -po r t a nt q u e s t i o ns . ❑

Notes and Statistical Analysis'The starting year of the survey, 1973, coincides with the first year in which signifi-cant numbers of women began entering the MBA program. Because of the smallernumber of women in these classes and our particular interest in women, the ques-tionnaire was sent to all the women listed in the alumni directory for those years andto about 65% of the men (randomly selected).

=The variables used in this and later regressions are those which we found to berelevant in two earlier studies we did on MBA income. These studies are: "TheImpact of Marriage, Children and Husband's Income on the Income of a Group ofHighly- Educated Women," presented at the annual meeting of the Eastern Econom-ic Association, March 1985; and "Income Differentials of Male and Female MBAs:The Effects of Job Type and Industry," presented at the annual meeting of theAcademy of Management, August 1985. The latter study was also coauthored byDeborah Cain Good.

'This equation looks at starting salary in thousands of dollars (SAL) as a functionofa dichotomous variable for being female (FEM), years of full -time work experi-ence prior to the MBA (YRPEMP), and year the MBA was received (MBAYR);this last variable allows for linear increases in starting salary over time. The estimat-ed equation, with standard errors in parentheses, is:(1) SAL = - 62.3119 + 0.2036FEM + 1.015MBAYR + 0.1438YRPEMP

(0.4225) (0.0686) (0.0834)Adjusted R Square = 0.5442

Of these variables only MBA year is statistically significant.'In our second regression for starting salaries, we add dichotomous variables for

accounting positions in public accounting (PUBACT) and in banking (BANK) tothe other explanatory variables.(2) Sal = - 60.5494 + 0.2438FEM + 1.0049MBAYR

(0.4169) (0.0675)+ 0.1108YRPEMP - 1.0923BANK - 1.3652PUBACT

(0.0824) (0.6218) (0.4254)Adjusted R Square = 0.5630

Of these variables the coefficients for MBA year and Public Accounting are statis-tically significant at the 95% confidence level and the coefficient for Banking ismarginally significant at the 90%n confidence level.

'We regressed current salary (CURSAL) on the dichotomous variable of being awomen (FEM) plus some other general variables which we found in prior studies areoften significant determinants of current income. These variables are Years of Full -Time Work Experience since the MBA (YRFEMP), years of full -time work experi-ence prior to the MBA (YRPEMP), years of part -time work experience since theMBA (YPTIME), years of unemployment since the MBA (YRUNEM), and start-ing salary (SAL). All of these variables are expected to have positive coefficientsexcept years of unemployment and years of part -time work, which we have found tohave negative coefficients. Years of prior work experience may have an insignificantcoefficient if the impact of prior work experience is captured in starting salary.The results of this regression are:(3) CURSAL = - 2.2780 - 3.9725FEM + 3.8529YRFEMP + 0.7615YRPEMP

(2.0751) (0.4366) (0.4015)- 5.9699YPTIME + 2.0963YRUNEM + 0.9932SAL(3.5756) (4.7214) (0.3217)

Adjusted R square = 0.3785In this equation, years of full -time work experience and starting salary are statisti-

cally significant, and gender and years of prior work experience are marginally sig-nificant at the 90% confidence level. The coefficients for part -time work and yearsof unemployment are not significant.

The variables which we added are the following: Senior Management Position(SENIOR); Middle Management Position (MIDDLE); Currently Working in anAccounting Position (ACCTG); Currently Working in Public Accounting (PU-BACTNOW); Currently Working in Banking (BANKNOW); and initially Workingin Public Accounting (PUBACT). The last variable is added to test the argumentthat it is useful for one's career to begin in public accounting.The estimated equation is:(4) CURS AL =4.3555 - 4.0880FEM + 2.9328YRFEMP + 0.4982YRPEMP - 5.6302YPTIME

(1.99737) (0.4613) (0.3799) (3.3400)+ 2.8813YRUNEM + 0.9011SAL + 18.1717SENIOR + 1.8681MIDDLE

(4.4492) (0.3080) (3.4637) (1.9872)

- 5.0023ACCTG + 2.2350PUBACT + 2.1284PUBACTNOW - 3.8510BANKNOW

(1.9771) (2.0229) (2.6720) (2.5936)Adjusted R square = 0.4973

The statistically significant coefficients are those for gender, years of full -timework experience, starting salary, senior management, and a current position with anaccounting title.


How to Survive

Patricia Douglas,Ph.D., CPA, is

professor ofaccounting, Universityof Montana, Missoula,

Mont. She was anNAA vice president,1984 -85. This article

was submitted throughthe Western Montana

Chapter.

Teresa Beed, DBA,CPA, is associate

professor ofaccounting, University

of Montana.

Carrying out your job responsibilities isn't enough...learning how to cope with office politics, social activities,

and the evaluation and promotion process are the keys to success.

By Patricia Douglas, Teresa Beed, Karen Clark,and Sylvia Weisenburger

When they exit their college corridors, most of to-day's graduates are well prepared to enter thebusiness world, except in one area— behavior. Al-though most professors have imparted the neces-sary technical knowledge, few have discussed suchimportant subjects as office politics, dress codes,social interaction, general office behavior, or workevaluation and promotions. Most students stum-ble across these facts of life during their first fewweeks on the job, and that discovery can be trau-matic for the unprepared.

We'd like to offer some help for new accoun-tants who must operate in a conservative, image -conscious environment that stresses high stan-dards of achievement. Although much of thisadvice may seem basic or commonsense to somelong -time professionals, we've seen too many re-cent instances where it was painfully obvious thenew accountants had had little training outsidethe books.

Making a good impression during the first fewweeks on the job is difficult. The experience isakin to reading a book while walking through apark with the sprinkler system running. If youconcentrate totally on reading, you are assured agood soaking. Success depends on properly judg-ing the velocity and trajectory of the sprinkler be-fore deciding on a course and speed. Similarly, asa new employee you must evaluate office proce-dures, rhythms, and power sources before decid-ing how to behave. Total concentration on learn-ing the job can get you caught in the crossfire ofoffice politics. Proper maneuvering depends on al-tertness, agility, patience, and judgment.

The best way to learn is to observe the behaviorpatterns of colleagues. Which employees' opinionsseem most valued? Who leads formal discussions?

Who is instrumental in causing change? Throughobservation, you can discover who is valued bythe firm and is thus someone to emulate.

Until you have some sense of who is considereda good performer and a leader, it is best to spendmore time listening than talking. You also shouldbe sensitive to others' reactions to your comments.Who seemed impressed? Who resented the com-ment? Whose opinions mattered most to the su-pervisor? These reactions should be assessed andstored for future reference. They offer valuable in-formation about colleagues and office politics.

Social interactions also are important, but youhave to walk a fine line between social gadfly andbudding wallflower. No new employee is expectedto lunch with a different office clique each day,but neither is it wise to be glued to the office witha bag lunch. You don't have to accept every socialinvitation during those first few weeks, but declin-ing them all will create a definite loner image.

Being friendly and making friends are not thesame. Projecting a friendly attitude promotes of-fice harmony and builds a support networkamong employees, but office friendships add com-plexities. Women are particularly vulnerable tosnide remarks if a friend is a supervisor or a sub-ordinate. Prejudices surface quickly when promo-tions or good evaluations are received by or givento friends, especially if the friend is of the oppositesex. That the reward may have been well deservedoften doesn't seem to matter, so if you do makefriends in the office, make sure you and they workhard, put the company's interests first, and makesure achievements are merited.

Projecting a Professional Image

Working hard, grasping office policies andpractices quickly, and avoiding embarrassingclashes with peers and supervisors are importantto initial impressions. An employee also must look


and act like a professional. To be accepted as astaff accountant of A Company, the person mustlook, speak, socialize, work, and think like an ACompany accountant, even if it means performinga makeover to fit the company mold. (If the ma-keover more closely resembles plastic surgerythan cosmetic changes, perhaps you should con-sider changing firms — finding one that is morecompatible with your own image!)

Establishing a professional image means dis-carding most college wardrobes and hair styles.Not every accounting office requires suits, butthey are excellent additions to a recruit's ward-robe. Suits project a sedate, composed look, whichis necessary to a professional image. College -typesweaters and skirts or slacks and jeans may not beappropriate professional attire, nor would clothesfrom the set of "Miami Vice."

Women sometimes need to be reminded thatthey should visit a professional hair salon. Theyshould explain their circumstances —this is theirfirst job and perhaps they can't afford weekly ap-pointments —then leave the exact look to the styl-ist. If they can't afford this option, they shouldmake sure that their chosen hairstyle is a currentbut conservative look, not the "long stringy" or"afro" variety of the 1960s and 1970s and not theNew Wave or Punk rock star look of the 1980s.Would you hire an accountant who looked likeMadonna?

Interactions with others —both superiors andsubordinates —also must be handled in a profes-sional manner. Recent graduates who have heldparaprofessional jobs may not know how to treatsecretaries or clerical staff. Secretaries and clerksare professionals in their own right —they deserverespect and consideration. Too close an associa-tion, however, can be damaging, particularly towomen accountants. Some colleagues may beginto think of the professional as a clerk and makeassignments accordingly. Women, especially,must strive for a balance between "snob" and"buddy."

Proper use of the English language is anothermust. Slang expressions are permitted in most col-lege environments, but they are unacceptable in aprofessional position. Poor grammar sometimes isoverlooked in college term papers, but not in re-

ports to corporate management. Sloppy workingpapers, handwritten memos, and poor oral presen-tations also detract from a professional image.One of the main requirements for getting ahead isbeing a skillful communicator.

The phrase "college teaches you to be highlytrainable" is a truism that recent graduates oftendo not understand. The truth is that despite im-pressive educational backgrounds, most graduateslack the professional work experience to be an im-

mediate benefit to employers. A new accountantshould not expect to be in charge of a project, su-pervise staff, or make decisions. Core professionalskills must be mastered first. That is why low -lev-el responsibilities are delegated to the newly hired.You can't make decisions about a company's fu-ture unless you know how it operates and under-stand what's behind its financial statements.

Once you have mastered the basics, you becomeeager to move ahead, but corporate evaluationand promotion procedures can be a rude awaken-ing. College experiences form expectations of awell - defined, objective evaluation system. Testsusually are fair and are administered impartially.Promotions are predictable: if you pass the test,you automatically are admitted to the next level.By contrast, corporate evaluation and promotionpractices may not be administered fairly —andthey surely are not predictable.

The path from entry level to controller is usual-ly ill- defined. A few identifiable steps lie along thecourse — general accountant, supervisor, manag-er —but no defined set of requirements exists topass an employee smoothly from one level to thenext. Although objective measures such as suc-cessful and timely completion of assigned tasks,accuracy of report preparation, and a quick graspof procedure and detail contribute to promotions,subjective factors such as attitude, dress, and neat-ness also influence promotion decisions.

In addition, often the manager. preparing theevaluation is just one level above those employeesbeing evaluated. A bright, competent staff personmay receive average evaluations because of a su-

pervisor's subconscious effort to keep the stafferone level below. Personal competition or social re-lationships may have as great a bearing on an em-ployee's review as technical performance, so sub-standard work may receive glowing evaluationsbecause of friendship or social connections. Evenwithout these overt biases, most supervisors havedifficulty making an objective evaluation.

Promotions typically are based more on supplyand demand than on achievement. If all managerslots are filled in an organization, qualified per-sonnel will remain in subordinate positions until aslot opens. Conversely, individuals with a lessthan excellent performance record may be pro-moted if a warm body is needed to fill a position.

Karen Clark, CPA, isan audit senior,Dobbins, Deguire &Tucker, PC.

Sylvia Weisenberger isthe director of Internalaudit, University ofMontana.


Discriminationtakes subtleforms toda y

and isdifficult to

substantiate...each womanmust decide

how torespond to it.

Don't let these sidelights deter you. Formalevaluations can be beneficial. If you take criticalobservations as constructive comments ratherthan as personal affronts, you will grow profes-sionally. Most formal evaluations focus on areasfor improvement, and tears or hostile reactions tosupervisory comments will be catalogued.

Don't be perturbed if you don'treceive a formalevaluation. You are receiving feedback daily; itmay be packaged different from what you antici-pate, but it exists. No evaluation generally may beinterpreted as a positive impression of your work.

Career Management

While promotions may be a matter of supplyand demand, career management techniquesalong with a professional image enhance opportu-niti es for advancement. Career managementmeans more than just showing up for work anddoing what is expected; it means becoming in-volved in advancing your career. Moving swiftlyand safely from staff accountant to manager re-quires a strategy. A valuable part of that strategyis identifying and requesting supervisors and jobsthat will provide solid stepping - stones. An ac-countant also must remain professionally compe-

tent. Obtaining additional education or certifica-tion, participating in a professional organization,becoming involved in civic activities, and keepingup with business trends and company operationswill help you retain professional competency.

Survival Tips for Women

Although women and men face similar job diffi-culties, there are a few hazards that still affect

women more.

TRAVEL —READY OR NOTJob - related travel no longer excludes women

from certain employment opportunities as it oncedid in large accounting firms and most corpora-tions. But travel still means more for women thansimply packing their bags. For most women, par-ticularly those with children, preparing a familycan be difficult. Schedules, meals, and responsibil-ities must be prearranged. Most families are lessthan thrilled by the prospect of frozen TV dinnersand extra chores. A woman usually spends con-

siderable time just discussing the matter, makingsure everyone understands why the trip is neces-sary, who is traveling with her, where she will bestaying and can be reached during the trip, andwhen she will return.

A note for the novice: carry -on luggage is amust if you have an important meeting upon ar-rival. A garment bag, a small suitcase that fits un-der the seat, and a purse will accommodate mosttravel requirements for several days, maybe even aweek. There's nothing worse than scrambling fornecessities as a store is closing and your checkedluggage is 500 miles away.

Traveling also means knowing how to behaveresponsibly. Women travelers still are a minority.Socializing in these circumstances can be fun; itcertainly is an important way to establish yourselfin a peer group. One indiscretion, however, candamage a professional image faster than almostany other miscalculation. Women should avoid:

• Visiting a bar alone and sitting on a bar stool;• Starting conversations with strangers in a bar or

a restaurant when alone;• Leaving the party last or drinking beyond the

point where she can carry on a business conver-sation (while it is socially acceptable for men todrink beyond this point, women cannot do sowi thout someone f i l ing away a negativeevaluation);

• Going out on the town with one male colleague(though harmless, this action leads to raisedeyebrows and speculation about possible per-sonal relationships);

• Letting others pay for her way (women may beaccustomed to males picking up the tab, but inbusiness travel there is no free lunch and thewoman will pay in one form or another). Ad-vances and aggressive behavior usually increasewith the consumption of liquor. In such situa-tions, humor and gentle discouragement oftenrelieve the tension without causing permanentdamage to professional relationships. If a con-frontation is unavoidable, the woman shouldpick the location —a hotel lobby certainly ispreferable to a dark hallway!

LEARNING TO DISAGREEMen are able to disagree and still work together

effectively. Women are stereotyped as lacking thisskill. Whether true or not, women can and shouldlearn to disagree professionally. Women shouldstrive to accept criticism, even cutting remarks, asconstructive comments, putting aside any person-al animosity that surfaces involuntarily. As unnat-ural as this suggestion may seem, one should enda disagreement by acknowledging that there are,indeed, two sides of every issue or by letting theother person know that his point of view is under-


stood, even if there is no agreement.

OVERCOMING AWKWARD MOMENTSBeing relatively new to the profession, women

sometimes encounter unsettling slights. One awk-ward situation is shaking hands. Should a womanshake hands with men entering a room or in a re-ceiving line? No etiquette rule covers the situa-tion, but if a woman wants recognition as a peer,then she ought to shake hands. Because men areunsure of the appropriate behavior, a womanshould not wait for them to make the first move.She should step right up, extend her hand, andgive a firm handshake. It puts everyone at ease.

Professional staffers frequently are mistaken forsecretaries. Caught off guard, a woman mightspontaneously show indignation or anguish. Nei-ther response is professional, and neither helps

change stereotypes. Even if this mistake happensrepeatedly, a woman should always take time toexplain that she is not the secretary but that shewould be happy to locate that person. Some wom-en go so far as to offer to help, but that may onlyreinforce the requestor's idea that she really is thesecretary! Most important, a woman should con-trol her emotions and respond professionally. Anangry outburst not only offends the person whomade the mistake, but it may alienate the womanfrom the secretarial staff.

COPING WITH DISCRIMINATIONDiscrimination still exists in some organiza-

tions. Federal laws and court precedents mayeliminate overt practices but not basic prejudices.No supervisor will tell a woman that she will notbe promoted because of her sex. Most males willnot make overt propositions. Women may, how-ever, be assigned tougher duties, more difficulttravel schedules, or less desirable office space, toname a few examples. Discrimination takes subtleforms today. While less threatening than a decadeago, it is harder to substantiate.

Each woman must decide how to respond todiscriminatory practices. Based upon recent expe-rience, court battles may not be the most effectiveresponse. A sizable settlement may not compen-sate for a potential interruption to a career. Publi-cized legal disputes may reduce one's chances of

finding other employment; the litigant may bedubbed a troublemaker. For these reasons, manywomen opt to live with some level of discrimina-tion, although it can be difficult. If you protest ap-parent discrimination frequently, you are called a"libber" and usually end up the object of officesexist jokes. On the other hand, if you do not reactyou may damage your self - esteem and long -runcareer opportunities. Males tend to assume thatthe silent female is so grateful for employmentthat any abuse will be borne in silence. That wom-an may then be encouraging discriminationagainst other women.

Behavior short of either extreme tends to bemore rewarding and is more apt to influence maleattitudes positively. Before objecting to "coffee de-tail," a new employee should make sure that thisassignment is given only to women. If so, shemight make it once and then suggest politely thatthe office staff take turns. Repeated assignmentsas committee secretary, another common ploy,may be turned into an advantage. Frequently, thatposition can be the most powerful one. Phrasingand composition of the minutes may have moreimpact on decisions than all the rhetoric at thecommittee meeting. If the duty really is distaste-ful, then a woman should state matter- of- factlythat she is interestd in another position. Such aresponse, particularly if the objection is madewithout evoking reference to discrimination, hasamazing results.

A similar approach can be used to avoid sexualharrassment. Females should suppress the naturalreaction to lash out verbally or physically. Maleswho condone or engage in sexual harrassment areprepared for such reactions and have perfected re-sponses which only demean the victim. These menare not prepared for a rational discussion of howsuch behavior could affect both careers or othersin the office or at home. Again, the more a womancan cope without directly accusing someone ofharrassment, the more likely the two individualscan work together professionally. For some wom-en, these approaches may be too mild or out ofcharacter. Each woman should decide for herselfsome limit when legal action will be pursued.

Becoming Successful

Professional success requires dedication, talent,political savvy, planning, timing, and luck. As in agame of chess, the aspiring professional shouldknow the workings of each playing piece, have aplan of attack, and anticipate the maneuverings ofother players. Many other unwritten rules of theprofessional game exist. Perhaps with added sensi-tivity and awareness of the basics, a recruit will beable to discern other necessary behavior patterns.A successful career is easier to achieve and enjoyif you start on the right track. ❑

A newaccountantshould notexpect to be incharge of aproject,supervise staff,or makedecisions.


,—�— OperatingRhuthm - � - �

!------ �

n ,a

James Wagner, CMA,is vice president,

finance, Sanidairy, adivision of Penn TrafficCo. He is a member of

Johnstown Chapter,through which he

submitted this article.

b bb

1

When production, distribution, and sales and marketingare synchronized, a company performs smoothly —and profitably.

By James Wagner

In the last decade, many American manufacturingcompanies have found themselves unable to com-pete. Their costs were too high and whole indus-tries were being lost to foreign competitors in ex-ports and imports. Figh tin g back, the imperiledmanufacturers analyzed and dissected their oper-ating m etho ds to th e point that, seemingly, nobody tissue could remain after all the biopsies

were out.The operating strategies of their foreign com-

petitors were codified and fed in large spoonfuls tothe accepting patient. Manufacturing systemswere installed involving full utilization of machin-ery, often highly robotized. These systems weremade more effective through the introduction ofsuch techniques as Manufacturing Resource Plan-ning (MRP) and Just -In -Time (JIT) application ofresources. These methods attack the old standardof having large resource allocations in raw materi-al inventories. Manufacturing in the USA was be-ginning to come back.

The MRP, JIT, and other systems, recentlywere joined by Optimum Production Technology(OPT) proposed by Dr. Eli Goldratt. His theoryemphasizes maximum throughput in manufactur-ing activities. This methodology somewhat disre-gards individual machine or cost center utilizationand concentrates on getting the most finishedproduct to the loading dock and on to the custom-

er. Manufacturing for inventory is minimized.The build -up of work -in- process and finishedgoods inventories to balance plant utilization isavoided.

OPT concentrates on the elimination of produc-tion bottlenecks to achieve maximum throughput.This is accomp lished by analyzing machine cen-ters where work in p roces s may queu e up. Somesolutions suggested are: farming oui various stagesof manufacturing to outsiders, even competitors;putting older less efficient machinery back on line;and so on. OPT is not even averse to throwing atarp over a machine at times if its continual usageis not necessary to get the throughput needed.OPT analyzes bottlenecks at machine stations orcost centers that bind up throughput. OPT isplant - oriented; it interfaces with marketing andsales primarily by offering them lower lead times.In the job cost or longer process line of multi -val-ue adding steps, OPT offers better response andmore reliable ship dates for customer orders withconcurrently less inventory holding costs. Profit-ability is enhanced by getting more product intothe customer's hand.

OPT is a valuable addition to production andinventory management. Taking OPT a step fur-ther, I propose an extension of the methodologyand call it Operating Rhythm or OR.

Extending OPT

Operating Rhythm is the logical extension of


OPT for companies processing a wide line ofproduct and performing extended service for theircustomers through distribution and marketingservices. Such companies would include food pro-cessors like dairies, bakeries, some frozen foodprocessors, and so on. These companies are char-acterized by having limited and costly storage fa-cilities and /or a perishable product over a fairlyshort life. They tend to have a diversified multi-product line with varying individual product de-mand and often, especially in food processing,semi -fixed contracts for raw materials. These areoperations where operating smoothness is tanta-mount to good financial return.

OR supports maximum resource utilizationover the long run, but demonstrates its special val-ue by analyzing shorter periods of time such as amonth or quarter. Because it takes a snapshot ap-proach to the manufacturing and distribution net-work it considers many so- called variable costitems as fixed, even frozen over the short run.Some of these situations are:

• Contracts for product ingredients or compo-nents, obligations which cannot be averted ordelayed.

• Limited storage space and /or product life.• Various cost center labor crews protected by

union contracts.• Established delivery route systems.• Sales contracts.• Predatory competitive conditions.

OR begins with the preparation of a compre-hensive and detailed forecast for short segments ofthe fiscal year (one month or even less) that pro-jects the availability of production, distributionand service resources, and the expected customerdemand. This projection is in addition to the regu-lar financial forecasts. These plans provide a guidefor the operational adjustments of various sorts tobe explained later. Each cost center can indepen-dently plan its own optimum operations but thecrucial step is melding these projections into anoperating rhythm that produces the highest real-ization of goals considering the available resourcesof the organization. Because these centers mustintegrate with many others broad considerationsare needed in order to reshape each cost center'sstrategy for maximum efficient throughput. Theneach subsidiary or division's plans should be mod-ified to contribute to the maximum overall bene-fit. A full -line dairy, such as Sani- Dairy, has oper-ating cost centers with individual plans. Theseplans must be harmonized within the division andthen balanced into the plans of sister divisions forintercompany transactions and outside marketingrealities for independent sales activities.

OR's mechanism functions best when finance,

manufacturing, and marketing decision makersget together to review the actual operational situa-tion of the current period compared to plans madeperhaps a year earlier. Some questions that mustbe asked and answered to ensure maximum corpo-

rate return are:

• In what area is sales volume slack or perhapsburdensome?

• What supply or distribution problems havedeveloped?

• What cost center is having difficulty maintain-ing needed service on an economical basis?

• What strategies must be adjusted to meet a newmarket situation?

The controller has probably provided much ofthe data used by his or her executive colleagues intheir deliberations; however, some key informa-tion will come from outside the formal informa-tion structure. Often these are only "t idbits"brought in by sales, distribution, and purchasingpersonnel from the field. Also considered are first -line cost center supervisors in the plant who pro-vide much of the "floor info" in their daily reportsand also reports from maintenance and garageforemen who keep things running.

The management accountant often is calledupon to describe the financial impact of this wide-ly diverse information. Besides taking part in ana-lyzing the ongoing situation, the controller oftenwill be a formulator of the adjustments needed torestore the planned OR.


What does this interactive system called ORprovide for the overall organization? It providescourses of action that are usually superior to cor-rections implemented in only one area. Manufac-turing, for example, might cut back the activitiesof a cost center or put its production in storagewhen an interactive solution might be for the salesdepartment to quote some special deals to certaincustomers and move the backed -up product.

In an illustrative production problem, Figure 1demonstrates how noncoordinated solutions candisrupt OR in contrast with Figure 2 which re-stores OR.

In our hypothetical problem, Distribution in-

forms Sales and Production of a slowdown inProduct A. Production states that Product A pro-cessing is integral with B which is moving accord-ing to plan. Without considering other parts of the

Figure 3Net Sales

hlid-tt ' Dairy produc 5. Non-dairy lee cream Noveltie ,

Ingredients Ingredients Ingredients Ingredients — Ingredients+ + + - + +

Carton Carton ^ -.nor. Carton Carton

Variable Variable Variable Variable VariableProc. Proc. Proc. Proc. Proc.

Receiving Receiving Receiving Receiving ReceivingLaboratory Laboratory Laboratory Laboratory LaboratoryMix Prep. Mix Prep. Mix Prep. Mix Prep. Mix Prep.Packaging Packaging Packaging Packaging Packaging

Cooler Cooler Cooler Cooler CoolerLoad Out Load Out Load Out Load Out Load Out

Dock margin or plant cost for each product line

Delivery Delivery Delivery Delivery Delivery

Transport Transport Transport Transport Transport

Wholesale Wholesale Wholesale Wholesale Wholesale

Marketing Marketing Marketing Marketing Marketing

Administration Administration Administration Administration Administration

Contribution margin

Respective fixed costs

Operating income


corporate equation, the singular production solu-tion would be to produce normal amounts of Aand divert the oversupply to inventory. This solu-tion solves the production problem but the distri-bution system is burdened with stockouts of need-ed product because of holding space taken to solvethe problem. Moreover, sales and marketing facefeedback from short codes on Product A andstockouts of other product, especially B. Figure 1illustrates this solution.

The Operating Rhythm solution to the sameproblem is:

Sales Department announces special promo-tion of Product A with point -of -sale promo-tional pieces.

2. Distribution makes certain point -of -sale piecesare in place and customer has sufficient Prod-uct A.

3. Production maintains product flow with thecaution that an alternative processing methodmay be needed to produce Product B if sales ofProduct A do not respond.

4. Result: planned operating rhythm is main-tained and there is little or no disruption. (SeeFigure 2.)

A problem could arise in any of the other oper-ating centers, the outside market, or even in an-other division buying some of your product. Thelocation of the problem is not as important for ourdiscussion here as how it is solved.

OR considerations almost always involve quan-titative, not just financial criteria. Manufacturing,warehousing, and distribution people rely heavilyon such measures as: gallons per man hour, casesper hour, and carton miles. It is their language,but it can also be the downfall of integrated opera-tions. Going back to Figure 1, it can be readilyseen how a cost center could slip out of rhythmwith other organization centers if it decided tomaximize its perception of success; i.e., a high -gal-lon -per- man -hour ratio. It was this kind of think-ing that the manufacturing plant example in Dr.Goldratt's book was experiencing. The plant washighly robotized and had astronomical per -unitefficiencies at an individual work station, but totalplant throughout was choked and inventorieswere bloated. Goldratt's OPT attacked this prob-lem with an emphasis on throughput, not maxi-mum machine efficiency. OR takes it a st epfurther.

Find a Single Measure

In OR, because so many differing work centersare involved, I recommend finding a single quanti-tative measure that can be applied to all work cen-ters. Our company uses a quart. It could be a loaf,a gallon, a case; but it should be small enough to

be practical in all centers. In a dairy, it is possibleto provide efficiency measures for even service de-partments, such as sales, marketing, and adminis-tration, on a per -quart basis.

Whatever unit is selected, it should be usedthroughout the projection process and continuedon to the various actual cost center reports thatform the basis of OR considerations. The financialmeasurement comes in when a price or cost is as-signed to the unit of measure. In a stable econom-ic environment, percent of sales would be a good,complimentary consideration if sales mix wasrather constant.

At Sani -Dairy, there are more than 500 prod-ucts spread over the five major operating catego-ries shown in Figure 3. Each item in a category,i.e., Delivery- Transport in the Dairy ProductsGroup, has its financial value, percent of sales,and the quarts -sold quantity. The expense centersare adjusted for the costs associated with productgoing into or being removed from inventory andsold. Fixed costs also are segregated into process-ing, distribution, marketing, and administration,but these costs are usually not relevant to ORconsiderations.

Armed with sufficiently detailed projectionscompiled in a manner that parallels the monthlyoperating statements and with good field reports,the executive committee can fine -tune all opera-tions for the organization's total advantage in themarketplace.

What does it take to get started? Besides thegood mechanics mentioned above, OR must haveCEO support from all divisions and subsidiariesinvolved. In Dr. Goldratt's book, OPT is put intoaction by the plant manager, literally against thedesires of higher management. That is possible be-cause OPT is plant- oriented. Operating Rhythmcuts across so many organizational lines it cannotfunction without complete executive support. Theconcept of adjusting individual operating centersfor the maximum total return instead of the maxi-mum local return does not come easily and issometimes a fragile agreement. Our company is amanufacturing division of a larger organization,feeding products to retailing divisions, as well asthe outside. It is admittedly difficult to get enoughsynchronization to achieve the maximum plannedOR. The crux of the whole OR scheme is the ef-fort and willingness to adapt and get back on theplanned track.

True Operating Rhythm is the one further stepwhich can be taken beyond Optimum ProductionTechnology espoused by Dr. Goldratt for organi-zations which are highly integrated vertically andhorizontally. In these industries, OR can rival for-eign operating techniques and, like OPT, can get"mo r e bang for th e b u c k " for Americancorporations. O

True Opera LingRhythm takesyou one stepbeyond OPT.


Institute of CertifiedManagementAccountantsJames Bulloch, Editor

Beyer Medal Winners —Dec. 1985 CMA Examination

The Institute of Certified ManagementAccountants is pleased to announcethe names of the award winners forthe December 1985 CMA examina-tion for the Certificate in ManagementAccounting.

Wayne R. Borkowski, associateprofessor, St. Martin's College, Olym-pia, Wash., won the Beyer Gold Med-al for the highest scores on the ex-amination. Scott E. Schroeder, theBeyer Silver Medal winner for the sec-ond highest scores on the examina-tion, is an accountant with Coopers &Lybrand, Louisville, Ky. Gregory E.Weigard, senior financial analyst atAir Products & Chemicals, won theRobert Beyer Bronze Medal. StanleyH. Helm of Gainesville, Fla., won theStudent Performance Award.

� F

Borkowski Schroeder

Five Win CertificatesFive other CMA candidates won

Certificates of Distinguished Perfor-mance for their achievements on theexamination. They are Susanne Ev-ans, financial reporting supervisor atRosemount, Minneapol is, Minn.;J a me s J . Gitter, audit ass ist ant atTouche Ross & Co., and NAA mem-ber, Milwaukee, Wis.; Stephen G.

Hansen, staff accountant, Mabie As-sociates, Stevens Point, Wis., andHeart of Wisconsin member; KennethA. Herchuk, staff accountant, De-loitte, Haskins & Sells, Houston, Tex.;and Soong Hyun Park, associate pro-fessor, Rutgers University, ScotchPlains, N.J.Profiling the Winners

Gold Medal winner Wayne Bor-kowski is a CPA who was graduatedwith a B.S. degree in accounting fromDe Paul University, Chicago. He thenearned an MBA degree from De Paulby a ttending evening classes. Cur-rently chairman of the accounting de-partment at St. Martin's College, hehas served as a manager of financialservices at IBM, Menlo Park, Calif.,and as a staff accountant with Ernst &Whinney, Chicago.

Mr. Schroeder, the Silver Medalwinner, also won the American Insti-tute of CPAs' Elijah Watt Sells Certifi-cate in Recognition of Performancewith High Distinction on the Novem-ber 1984 Uniform CPA examination.He has a B.S. degree in accounting

from the University of Kentucky wherehe won the Most Valuable SeniorAward, Football, Fall 1983. He i s amember of NAA's Louisville Chapter,

Mr. Weigard, Bronze Medal winner,was graduated from Lehigh Universityin 1981 with an MBA degree. He hasgarnered a number of honors duringhis scholastic career including theAmerican Marketing Assn. Outstand-ing Graduate Student Award, Who'sWho Among Students in AmericanUniversities and Colleges, and theWall Street Journal Award to the eco-nomics major with the highest aca-demic average. The latter two awardswere earned while he was at UrsinusCollege, Collegeville, Pa., where hegraduated magna cum laude wi th aB.A. in economics. He played fouryears on the varsity basketball teamand also plays in the Blue Mountain(semi -pro) Baseball League.

Student Performance Award winnerStanley Helm earned a B.A. degree inaccounting from the University of Ne-braska in 1974 and a J .D. de gr eefrom Creighton University in 1980. Hecompletes requirements for a mas-ter's degree at the University of Flori-da this summer. He also has passedthe CPA and CIA examinations.

A to t al of 2 ,441 can d id a t es s a t fo rthe December 1985 CMA examina-

tion, and 456 candidates completedthe examination requirements. Select-ed statistics for the last three exami-nations are presented below.

The first of two 1986 examinationswill be held this month at 69 locationsthroughout the United States, TheICMA estimates that over 2,500 can-didates will be taking the exam.

For further information about theCertificate in Management Account-ing, write to: ICMA, 10 Paragon Drive,P.O. Box 405, Montvale, N.J. 07645.11

Success Rate on the CMA ExaminationDecember June December

Examination Part 1984 1985 1985

Part 1 Economics and Business Finance 46% 48% 43%Part 2 Organization and Behavior Including Ethical

Considerations 38% 51% 46%Part 3 Public Reporting Standards, Auditing and Taxes 48% 44% 48%Part 4 Internal Reporting and Analysis 54% 45% 41%Part 5 Decision Analysis, Including Modeling and Information

Systems 44% 60% 49%


-, , _� � �1' r ni r •l!I ' ..�?� � � nr,� :� ic�r�"� i:� l�°L)il:� '4� i1i1� � !m•� {� �

i l —

Paragon Pricing� : � ao� o' b.S/ � Òpp00 $ I p p . 0 0 d • S � 0 00 0 ° ' $ \ o � , O p o

A new costing system enabled a yarnbo°°-� 4.qo�°o.opo� o manufacturing company to deduct? $1

C, cam oue% $100,000 per month from its tax bill.

, ; o a c Z>00 /0o

o� s ue c0

By John A. Pearson

Absorption costing and variable costing are two ofthe most common methods of product costing.The basic difference between these two methods ishow fixed indirect costs (factory overhead) are ac-counted for.Factory overhead costs are included in the in-

ventoriable costs under absorption costing, but areexcluded from inventoriable costs under variablecosting. Variable costing regards fixed manufac-turing overhead as a period cost to be expensedimmediately, while absorption costing recognizesproduct costs as inventoriable items that flowthrough the income statement when the item issold. Neither the public accounting profession northe Internal Revenue Service has approved ofvariable costing as a generally accepted method ofinventory valuation.

While the idea of absorbing costs based on a fa-cility's practical capacity is not new, companieshave not been eager to adopt the concept. Practi-cal capacity, the capacity at which a facility canbe expected to operate given an allowance for nor-mal machine downtime and interference, is diffi-cult to determine. Thus, companies allocate over-head based on normal capacity, which is theexpected level of manufacturing output based onprojected sales.

One reason why practical capacity has not beenused is because historically normal and practicalcapacity are considered to be sufficiently close ex-cept in times of business cycle downturns. Anoth-er more pervasive reason is the IRS' refusal topermit it. Under absorption costing, a companywill capitalize product cost in inventory until anitem is sold.

However, if a company has facility - related costsbased on practical capacity, its taxable incomewill be less than it would be under traditional costaccounting methods. The effect is an immediate

tax benefit for the cost of excess capacity.

Allocation of Costs Based on Practical Capacity

Paragon pricing is a cost -based concept. Th eparagon pr ice is a revenue amount that reflectsthe cost of t he item plu s a m argin in excess ofthese costs —set by policy —that provides an ade-quate return on capital.'

Table 1Corporation A

Theoretical capacity =70units/hour

reia0�Oo\� .00

Operation time _

199 6 0(based on 8 hrs /dayx5 dayslwk hourslyear

x52 wks/yr less 15 shutdowndaysx8 hrslday)

Allowance for downtime =

Actual production =

of practical capacitybefore reduction for

5 0/odowntime

96,000 unitsEnding inventory = 89640units

Theoretical capacity for the year _ 1379 2 0 0units(1,960 hourstyearx70 units/hour)

Less: Allowance for downtime(5%x137,200)

Practical capacity =

6,860units

1 3 0 , 3 4 0 u n i t s

There are two components associated with par-agon pricing: the cost of the product and the prof-it margin. Th e profit margin is determined bymanagement policy and market demand. The costof the product is derived from the aggregate of thethree manufacturing cost elements—direct mate-


00

John A. Pearson isspinning plant cost

analyst for CaronInternational, Inc., He

is a member of theRockford (III.) Chapter

of NAA, through whichthis article was

submitted.

rial, direct labor, and indirect manufacturing cost.Indirect manufacturing costs (factory overhead)are further divided into a variable factory over-head and fixed factory overhead. Paragon pricingis unique because of the way in which fixed costsare absorbed by the product. Traditionally, fixedfactory overhead costs are absorbed based on nor-mal capacity. In contrast, paragon pricing allo-cates fixed costs based on practical capacity. Hereare the four steps involved in determining practi-cal capacity.

• Carefully set the theoretical capacity level foreach cost center. (Based on industrial engineer-ing studies, the level of production that couldbe attained if the department operated continu-ously at peak efficiency.)

• Determine the amount of expected downtimedue to normal work stoppages arising from theproduction process, i .e., routine maintenance(the maximum production level of the costcenter.)

• Determine the constraints imposed on a costcenter's capacity to produce because of up-stream and downstream bottlenecks in the pro-duction process. (The production level is re-duced to the maximum production level thatthe cost center could be expected to maintainunder practical circumstances.)

• Make an annual review of the practical capacitylevels to determine if last year's estimate wastoo high or too low.

It is important to note that the market demandfor the product is not included in the calculationof practical capacity. Instead, practical capacity isan estimate of the capacity to produce goods.

Under the practical capacity concept, the per-centage of practical capacity represented by actualproduction is used to determine the total amountof fixed indirect production cost to be included ininventory. These fixed indirect production costsare combined with the variable indirect produc-tion costs and are allocated to goods in ending in-ventory. The difference (if any) between theamount of all fixed indirect production costs andthe amount of fixed indirect production costs in-cluded in the computation of inventoriable costs isallowable as a deduction for the taxable year inwhich such difference occurs (see Table 1).

Corporation A has established the 130,340 unitlevel (practical capacity) as the basis for the calcu-lation of the amount of fixed indirect productioncosts to be included in the computation of theamount of inventoriable costs for the current year.Under this basis, if only 96,000 units were actuallyproduced for the year, then 73.7% (96,000 unitsof actual production/ 130,340 units of practical ca-pacity) of the fixed indirect production costs

would be included in the computat ion of theamount of inventoriable costs during the year.The remainder of the fixed indirect productioncosts (26.3 %) not included in the computation ofthe amount of inventoriable costs are deductiblein the year in which they are paid or incurred.Furthermore, 9.0% (8,640 units of ending inven-tory /96,000 units of actual production). of thefixed indirect production costs included in thecomputation of the amount of inventoriable costs(73.7 %) and 9.0% of the variable indirect produc-tion costs would be included in the cost of goodsin ending inventory.

IRS Approves

A case filed on July 28, 1982, involving BrushWellman, Inc., vs. Commissioner of Internal Rev-enue, is responsible for the Internal Revenue Ser-vice acceptance of the practical capacity concept.The Tax Court held that: "Petitioner's practicalcapacity determinations, which reflected produc-tion capability instead of reflecting average actualproduction or anticipated sales, satisfy the re-quirements of the practical capacity regulation,sec. 1.471- 11(d)(4), Income Tax Regulations. Ac-cordingly, petitioner is entitled under the regula-tion to deduct the part of fixed indirect produc-tion costs which is associated with idle capacity inthe year of production rather than waiting to de-duct it in the year in which the produced goodsare sold."'

Paragon pricing offers a legal exception to thegeneral rule contained in the full absorption regu-lations that all production costs are inventoriablecosts. Although the establishment of a facility'spractical capacity requires careful and meticulouscomputations, the tax benefits are worth the addi-tional effort, especially in periods of economicdownturn when idle capacity is most likely to

occur.The yarn manufacturing company I work for

has successfully adopted the paragon pricing cost-ing system. As a result, for the first five months ofthis fiscal year the company has been able to takea tax deduction of $100,000 per month.

The rapid advancement of production technolo-gy coupled with the constant fluctuating nature ofbusiness cycles causes many manufacturers to findthemselves with excess productive capacity. Para-gon pricing provides an immediate tax deductionfor the fixed indirect production costs associatedwith the difference between the practical capacitylevel and the actual production level (idle capaci-ty) . It is a cos t ing sys tem that deservesconsideration.

'Daniel P. Keegan, - How to Minimize Pricing Guesswork;' Management Review.October 1984, p. 15.T.S. Government Printing Office, Washington, D.C., "Brush Wellman, Inc., vs.Commissioner of Internal Revenue" United Stares

Tar

Court Reports. 1983, vol.79. pp. 160 -185.


Letters

1 9 "bucked President Reagan by refusing toeven debate the Democratic - written taxreform bill, I read Robert Shultis' col-umn, "Letters —We Get Letters" in theDecember issue. So, I looked back andfound Roger Doost's letter in the Sep-tember issue, which you so accuratelycaptioned "An Impossible Utopia ?"

The answer, Yes!Mr. Doost's simplified income tax

doesn't go far enough. The only incometax intended to solely finance our feder-al government is a flat -rate tax with nodeductiobns paid by everybody. But aswe have witnessed, once again, with lastyear's attempts at tax reform, politics inthe U.S. makes such a tax less possiblethan disarming and living peacefullywith the Soviets. All Americans simplyhave too many vested interets in thecurrent income tax structure to make aflat -rate tax with no deductions possi-ble. Since introducing his reform pro-posal, President Reagan has been urgingus to rally and present special- interestgroups from altering it. But what aboutthe special - interest groups that helpedwrite his proposal?

Without question, tax reform willpass this year, just in time to help candi-dates in the 1986 elections. Then the1987 Congress will again reform the taxlaw, undoubtedly eliminating some ofthe 1986 reforms. And the cycle willjust continue on and on with new tax re-forms coinciding with the elections ev-ery two years.

Vincent C. StaufferSalt Lake City, Utah

They Love Their Macs

After subscribing for years to MANAGE-MENT ACCOUNTING, I couldn't believemy eyes when I saw a review on the"Mac" in your April '86 issue. I've beenwaiting for the accounting sector of thecomputer market to f inally take theMac seriously.

Please continue with reviews of soft-ware and hardware available for the Mac-intosh. I feel like I've been the lone ac-countant in the wilderness over the lastfew months so it was a pleasant surpriseto read about your interest. I also was

slightly extravagant and bought the La-serWriter but haven't regretted it yet. Iam also interested in any accounting net-works that are in use for accountants whoown Macintoshs and would be interestedin helping to set one up if none exist.

William K. Turner, CPASalisbury, Md.

* s s

I thoroughly enjoyed your article onMacintosh!

As an academic, I am required towrite (word process) a great deal. TheMacintosh is truly an excellent machinefor desk -top publishing. In addition toMicrosoft Word, using Microsoft Excelas a spreadsheet and graphics package toincorporate directly into papers is tre-mendous... This technology is certainlyone tool management accountantsshould be adopting.

Thomas B. ClevengerAssistant Professor of Accounting

Virginia Commonwealth UniversityRichmond, Va.

Your enthusiasm for the Mac is sharedby many of us. I can put a new person ona Mac, use Microsoft Excel, and in 10minutes have them doing worksheetswith little or no supervision. They areable to pick up new applications as need-ed and enhance their skills to fit the job.

I would encourage you to move awayfrom the IBM mind -set, and start de-voting some space to the Mac as an al-ternative. In my office I have replacedfour of six 512 Macs with the Macin-tosh Plus. I also have four Apple 20meg. hard disks and a LaserWriter.

If those who have learned Lotus 1 -2-3, or tried to teach it, would exposethemselves to a product like MicrosoftExcel on the Mac, I think that he /shewould be in for a real surprise. It is fast,powerful,and easy to use and format.Lotus Jazz is also, but lacks some of thefeatures of the Excel spreadsheet (e.g.,macros), but it does have "hotview" andintegrates word processing and a termi-nal program with their spreadsheet, da-tabase, and graphics.

I also have a 512 Mac at home, asdoes my chief accountant.

John A. OsborneAssociate V. P. and Comptroller

The University of TulsaTulsa, Okla.

Taxes8 "mind in enacting Section 356 (a)(2)."

The Court also noted that when theparticular facts and circumstances of thiscase are analyzed, "the correctness ofour conclusion that the cash distributionof $3,250,000 did not have the effect of adividend... becomes even clearer." TheCourt pointed out that the IRS wants toconsider the payment as if it were madeby Basin. However, such a distributionwould have been impossible for Basin toconsider on its own because it was far inexcess of Basin's accumulated earningsand profits ($2,320,000) as well as its to-tal assets ($2,760,000). Moreover, thestock -plus -cash deal was the idea of NLCorporation, who wanted to minimizethe number of its outsanding shares, andwas not the idea of Clark.

Thus, the Tax Court concluded thatthe cash boot received by Clark must beconsidered a redemption by the acquir-ing corporation and not a dividend is-sued by the acquired corporation. Clear-ly, the effect of this decision can besubstantial. Publicly held corporationsintending to acquire small closely heldcorporations can now more readily offercash incentives to the shareholders ofclosely held corporations. The cash willnot affect the general tax -free status ofthe reorganization and it will not causeundue hardship to shareholders receiv-ing cash because any gain that must berecognized as a result of the cash distri-bution can be treated as capital gain andnot as an ordinary dividend.

MAP1 2 "Subcommittee on Oversight and Investi-gations will be continuing this year, ac-cording to Rep. John D. Dingell (D-Mich.) in a speech given to a NorthAmerican Securities Administrators As-sociation conference .... Staff proposalsfor rules that would require interim dis-closure of business segment informationhad been scheduled for consideration bythe commissioners of the Securities & Ex-change Commission last February, butwere not brought up at the meeting. As ofthis date, it is uncertain when the issuewill be placed on the agenda again.


L

Benefit -CostI

II II

0i

I I I ysis as a1 1 1 1 1 1

40 1

eeformanceThe B/C performanceindicator encouragesIndicat(ir lower levels of

management to tryand achievegoals set at higherpolicy levels.

By G. Stevenson Smith and M.S. Tseng

As government spending for programs and regu-lations comes under increasing scrutiny, attemptsare being made at national and local levels to con-trol costs using various types of budgeting meth-ods and cost projection techniques.

One example of cost control at the national lev-el is Executive Order 12291. It requires the socialcosts of regulations issued by all U.S. federal exec-utive agencies to be compared with their socialbenefits. The objective of this order is to try to en-sure that social benefits are maximized. If socialbenefits do not exceed costs, the program must bereconsidered.

Although the Executive Order was issued in

1981, an example of regulatory costs exceedingbenefits occurred in 1984. That year states beganfiling information returns with the IRS on stateincome tax refunds of $10 or more. In addition,they had to provide refund recipients with a state-ment specifying the amount of the refund. TheGeneral Accounting Office has estimated that thecost of implementing this legislation is $2 millionmore than the additional revenues generated fromit.

A management accounting technique that canhelp correct this problem is benefit -cost analysis.B/C analysis not only can be used to determinewhether or not a proposed government programor regulation should be put into operation it alsocan be used to measure efficiency and effective-


Figure 1Four -Stage Tree Diagram for BIC Ratios.

AGE 15 -44

BIC: 261.72p: 0.65

EDUCATION <8 -11

V BIC :HOrA

124.9654.60

299.0587.91

: 0.070.050.200.03

BIC: 211.40p: 0.44

EDUCATION 12.16+

Md 195.88 0.20Mr 220.34 0.220 216.97 0.23

V 166.60 0.08H 39.30 0.06Or 389.44 0.31A 147.02 0.04

BIC: 301.70 Md 367.84 0.30

p: 0.56

MALEBIC: 199.35

p: 0.48EDUCATION <8 -11

BIC: 49.87p: 0.62

AGE 45 -62

BIC: 83.89p: 0.35

EDUCATION 12 -16+

BIC:'

38.35p: 0.38

V 18.84 0.17H 9.92 0.19Or 90.79 0.18A -0.45 0.11Md 136.12 0.05Mr 83.38 0.010 72.28 0.29

V 42.18 0.13H 9.87 0.15Or 127.18 0.22A 39.87 0.08Md 280.12 0.11Mr

- -

0 223.48 0.31

V BIC: 95.18:

0.15H 72.67 0.07Or 125.51 0.18

EDUCATION <8 -11 A -22.02 0.01BIC: 109.74 Md 118.41 0.17

Mr 144.12 0.18p: 0.40

AGE 15 -44 V 117.98 0.16BIC: 142.34 H 59.74 0.07

p: 0.54 Or 184.13 0.22EDUCATION 12 -16+ A 96.76 0.01

BIC: 164.38 Md 238.01 0.31p: 0.60 Mr

- -

0 118.19 0.23

FEMALE V 6.72 0.24

BIC: 89.78 H 0.68 0.19

p: 0.52 Or 29.60 0.18EDUCATION <8 -11 A 0.37 0.03

BIC: 14.95 Md 7.80 0.05

p: 0.64 Mr 18.73 0.010 24.71 0.30

AGE 45 -62 V 29.41 0.20BIC: 28.13 H 5.98 0.15

p: 0.46 Or 63.76 0.26EDUCATION 12 -16+ A 73.89 0.03

BIC: 51.16 Md 83.46 0.11p: 0.36 Mr

- -

G. Stevenson Smith,Ph.D., CMA, isprofessor ofaccounting at WestVirginia University,Morgantown, WestVirginia.

; 0M.S. Tseng isprofessor ofEducationalPsychology andresearch associatewith the RehabilitationResearch and TrainingCenter at West VirginiaUniversity inMorgantown.


Werecommend

using BICperformance

indicators at allmanagerial

levels whenevaluating

expenditures.

ness of an existing program.We used B/C analysis to measure the effective-

ness of a vocational rehabilitation (VR) programin the State of Pennsylvania. Although this tech-nique has been used in the past to analyze suchprograms, our study represents the first time B/Canalysis has been used as a performance indicator.

Costs vs. Benefits

Costs. Direct program costs are expendituresthat specifically affect program participants. Forexample, these costs can result from a partici-pant's medical treatment, or from the legal prose-cution of individuals arrested in a drug enforce-ment program. Indirect costs are overhead costsand include an administrator's salary, buildingrent, cost of utilities, and staff training and travel.

Intangible costs are a third cost classificationthat is sometimes considered in evaluating govern-mental programs. Difficult to quantify, intangiblecosts are indirectly affected by the program's ob-jectives. The cost associated with the fear of testi-fying against an accused drug dealer in a drug en-

dition, as a multitude of intangible benefits areidentified, their marginal impact on B/C analysistends to decrease.Time Value of Money.Once program costs and

benefits are determined, the benefit and cost flowsneed to be adjusted by the time value of money.The multiperiod flows of costs and benefits needto be adjusted to the present time period by usingthe discounted cash flow method. A comparisoncan be made between the cost and benefit dollarsthat occur in different time periods. For the analy-sis a discount rate must be carefully selected, ormisleading data may result. Incorrect conclusionsalso can result from unequal periods over whichthe benefits are recorded. For example, youngerparticipants are likely to work for more years thanindividuals on the brink of retirement. Discount-ing flows of benefit dollars with varying inflow pe-riods can result in favoring younger individuals.

Following the selection of a discount rate andthe adjustment of cost and benefit flows for thetime value of money, the program's costs are di-vided into the program's total benefits and the re-

Figure 2Expected B/C Ratios for All Client Characteristics and Disabilities.

Client Characteristics Expected B/C Valueand Type of DisabilitySEX AGE EDUCATION

MALE FEMALE 15 -44 45 -62 <8 -11 12 -16+ V H Or A Md Mr 0

X X X 367.56 361.55 418.63 361.46 398 407.29 408.72

X X X 448.03 437.12 555.49 440.64 544.95 0 484.18

X X X 159.17 157.85 172.31 155.02 162.78 156.80 176.93

X X X 183.10 179.10 205.60 180.81 208.43 0 246.90

X X X 181.72 172.53 190.03 167.22,187-57 ,193.38 189.33

X X X 241.05 226.35 262.68 223.14 295.951 0 249.35

X X X 70.80 69.32 74.52 69.20 69.58 169.38 76.60

X X X 83.92 78.94 94.62 80.26 87.22 0 94.27

forcement case can be included in this category.Benefits. Aswith costs, benefits can be consid-

ered to be direct, indirect, or intangible. The di-rect benefits to the individual are increased earn-ings, freedom from drugs, or less dependency ongovernmental aid. The latter benefit also is a di-rect benefit for the government. Another directbenefit to the government is the increase in taxrevenue because individuals in the program haveregular work assignments and can accept jobswith higher salaries. Indirectly, the program bene-fits the family and employer of the individual un-der treatment.

The intangible benefits are those that accrue tosociety. For example, the rehabilitation of a childabuser or drug addict benefits society. However, amajor difficulty with the use of B/C analysis hasbeen to place a value on intangible benefits. In ad-

sult is a B/C ratio. In order for the benefits to begreater than the costs, this ratio has to be greaterthan one. As the benefits rise above costs, the ra-tio becomes increasingly greater than one.

Measuring Efficiency and Effectiveness

Our study analyzed the state of Pennsylvania'sVR programs. Based on our experience, we rec-ommend using a B/C performance indicator toevaluate programs and plan for changes. A B/Cperformance indicator can be used both as an effi-ciency and effectiveness indicator and to measureinputs and outputs from a program. Because itpleasures the degree to which resources have beenused economically, it is an efficiency measure. Theratio also can be used to measure how well pro-gram objectives are achieved -a measure of pro-gram effectiveness.


We considered benefits as inflows directly re-ceived by state and federal governments as taxrevenue increases and decreases in transfer pay-ments. Because governments have a finite amountof resources for an infinite amount of demands theprograms were evaluated in a manner that recog-nized these limitations.

B/C ratios were computed for a sample thatconsisted of 21,640 vocational rehabilitation cli-ents of the Pennsylvania Bureau of Vocational Re-habilitation from 1975 to 1980. In 1980, each se-lected client was employed.

Clients in the sample were classified accordingto age, education, disability (subdivided into se-vere and non - severe cases), sex, and marital sta-tus. Using the marital status, earnings, and num-ber of dependent s, we est imated the averagefederal individual income tax paid by a client be-fore rehabilitation. For example, if a client whowas referred to the program in 1975 was married,had no dependents, and earned between $5,000 to$9,999, the client's earnings were multiplied by3.4 %, the average federal tax paid by a client atthis income level in 1975. Income taxes for 1980were estimated in the same manner. Differencesbetween the two dates were caused by a change inthe tax rates and income level. The income taxrevenue benefit to the federal government wascomputed by subtracting, for each client, the esti-mated amount of federal individual income taxpaid prior to the rehabilitation period from thatpaid after rehabilitation. The same procedure wasused to compute Pennsylvania state and local tax-es using state and local tax rates.

Besides tax revenues gains, another benefit wasa reduction in transfer payments. If a client wason welfare at the time of referral, we determinedthe total amount of payments for the year. Thisfigure was compared with the annual amount paidfollowing rehabilitation. A decrease in the totalamount of payments was considered a benefit.

Any gain in tax revenues at the federal levelwas added to the gain at the state level and to thereduction in transfer payments in determining thetotal amount of benefits realized from the rehabili-tation program. We assumed that this amountwould be received by the client for the next 10years or until the person reached the age of 62,whichever came first. By discounting this annuityto 1980 we determined the present value of thebenefits received by the government from the VRprogram. Total benefits can be represented by thefollowing equation:

Total Benefits = Income Tax Increase to Stateand Federal Government afterRehabilitation + Reduction inState and Federal TransferPayments after Rehabilitation

Client costs were determined by adding the di-rect costs of rehabilitation plus an amount im-puted for overhead. Direct costs of the programinclude diagnostic and restoration services as wellas various types of training services. The overheadcosts consist of indirect contributions to the pro-gram. The overhead rate of 8% was estimatedfrom cost data relating to administration costs forPennsylvania in the State VR Agency Fact Sheet

Figure 3Selecting Clients Using B/C Ratios

AdmittedClients

Expected BICRatios

PossibleNew

Clients

Expected BIC

Ratios

A 70.80 E 74.52

B 190.03 F 94.62C 208.43 G 181.72

D 437.12 H 167.22

Admitted Client BIC Ratio (AVG.): 226.60

Admittance Choices:I. Matrix A: Admitting one or two new clients.

Ex3ected B/C Ratio:E F G H

E 196.12 179.26 193.77 191.36

F 200.20 197.12 194.71G 217.62 209.22

H 214.22

II. Matrix B: Admitting three new clients.

Expected B/C Ratio:F &G G &H H &F

E 179.61 189.98 177.54

F 192.85

III. Admit all four new clients.Client BIC Ratio (AVG.) with all eight clients: 178.06

Booklet for the years 1972 through 1977. Totalcosts of the program are symbolized as:

Total Cost = Total Service Cost + OverheadCosts (i.e., .08 X Total ServiceCost)

We did not consider it necessary to develop aB/C ratio in the strict "economic sense." In ourstudy, a B/C ratio is used as a performance indi-cator and therefore it is not necessary to incorpo-rate intangible costs and benefits into the analysis.

Another consideration when cost and benefitsflows are analyzed is the time value of the flows.To make comparisons between cost or benefitflows that occur at different time periods, we se-lected a discount rate of 10% to make the flowscomparable.


Our analysis of program benefits started afterthe client completed the rehabilitation process.Benefits were computed for 10 years after the par-ticipant left the program or until the personreached the age of 62 years, whichever came first.The present value of these benefits were computedbased on the year the client completed the pro-

Table 1Benefit -Cost Ratios

Severe Non - Severe Total

Group N BIC N BIC N BIC

Total Sample 8974 147.77 12666 139.07 21640 142.68

Mayor DisabilityVisual (V) 2257 81.30 904 28.59 3161 66.23

Hearing (H) 1027 17.86 1328 26.20 2355 22.56

Orthopedic (Or) 1415 308.47 3376 154.78 4791 200.17

Amputee (A) 160 135.72 723 34.75 883 53.05

M. Disorder(Md) 1477 231.62 2419 241.14 3896 237.53

M, Retardtn (Mr) 345 228.50 778 165.33 1123 184.74

Other Disorder (0) 2293 106.89 3138 140.61 5431 126.37

SexMale 4109 203.21 6338 196.85 10447 199.35

Female 4865 100.94 6328 81.20 11193 89.78

EducationLess than 8 939 115.23 2073 85.11 3012 94.50

8 771 47.28 1445 48.84 2216 48.30

9 -11 2572 123.98 3171 111.36 5743 117.01

12 3826 169.36 4622 173.20 8448 171.46

13 -15 613 230.75 881 270.64 1494 254.27

16 or more 253 289.02 474 258.15 727 268.89

Age15 -24 2754 186.50 2683 212.85 5437 199.50

25 -34 1980 197.16 2254 233.43 4234 216.47

35 -44 1264 211.60 1769 198.95 3033 204.22

45 -54 1126 91.77 2096 115.92 3222 107.48

55 -64 847 46.56 2141 32.25 2988 36.31

65 or over 938 -0.05 1667 -1.48 2605 -0 .97

gram (in all cases, 1980) and was compared withthe total costs of the program from 1975 to 1980.

B/C Ratio = Present Value of Total Benefits

Total Costs

Present value methods were not applied to thecosts of VR program. With economic B/C analy-sis, the primary concern is to determine whetherthe present value of benefit inflows is more or lessthan the cost outflows. Unlike economic B/Canalysis, our study is concerned with establishinga performance indicator for managerial purposes,which is a relative measure. In addition, the costinformation was not available in a form that al-lowed the compounding of costs from the year ofentry into the program to the year of completion.Benefit cost ratios are presented in Table 1.

The results, as shown in Table 1, indicate thatthe benefits exceeded costs in almost all classifica-tions. The B/C rat io for the ent ire sample is142.68. In the "65- and - over" age group the resultsare negative as is expected. In major disabilityclassifications, hearing impairment has the lowestB/C ratio (17.86). Mental disorders and orthope-dic problems have the highest B/C ratios. In gen-eral, males appear to have higher B/C ratios thanfemales. A higher level of education, 12 andabove, results in a higher B/C ratio. Youngermales with more education have higher B/C ra-tios regardless of the disability.

The B/C ratios were calculated during a stronginflationary period in the United States. There-fore, some of the "benefits" attributed to the VRprogram most likely reflect wage increases andcorresponding tax increases due to inflation andnot to improvements in the client's status. Be-cause the study covers a short time period, we didnot make any adjustments for this fact.

Measuring Staff Performance

The B/C ratio can be used to evaluate counsel-or and program performance. For example, VRcounselors, departments, and the program couldbe given a pre - established B/C ratio as their goal.Figure 1 illustrates a technique that can be used tohelp individuals and departments achieve thesepredetermined B/C goals.

The technique involves the use of the expectedvalue theory to determine how the program is af-fected when a new client is admitted. The follow-ing equation is used to calculate the B/C ratio foreach situation:

E = a i p1 + a2 p 2 . . . . . . . . a k Pk

In the equation, aV a2.....

a are numericaloutcomes or B/C ratios, and p 1, p 2 . . . . . Pk are theprobability of these numerical values occurring. Eis the expected value of occurrence. In our study,expected values are expected B/C ratios.

A four -stage tree (Figure 1) shows the B/C ra-tios for participant characteristics and their prob-abilities for occurrence along each path of thetree. The probability tree is calculated using theVR data from Table 1.

To use this information in combination with aB/C performance goal, first calculate the expectedvalue for each outcome. The results of the expect-ed value calculations are shown in Figure 2. As anexample of how Figure 2 can be used, look at thethird row in the table where the expected B/C ra-tios in the seven disability classifications for malesin the 45 to 65 + age group with an educationallevel of eight to eleven years are listed. For exam-ple, a participant in this classification with an or-thopedic disability is expected to have a B/C ratio


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equal to 172.31.Reviewing the data in Figure 2 shows that

males between the ages of 15 and 44, 12 and 16+years of education, and an orthopedic disabilitywill have the highest expected B/C ratio - 555.49.The selection of one participant with this B/C ra-tio would enable the counselor to select many oth-er participants with lower B/C ratios and stillmaintain an average B/C ratio of 150, an assumedpredetermined goal for the department. For exam-ple, the selection of one participant with the high-est expected B/C ratio (555.49) allows the caseworker to select almost five participants with thelowest expected B/C ratio (69.2) and still meet thepolicy guideline of an average B/C ratio of 150.'

Carrying this procedure one step further, let'sassume that a case worker admits four partici-pants into a program and must consider four oth-er clients for possible admission. In Figure 3, Cli-ents A, B, C, and D have been admitted into theprogram. The average expected B/C ratio for thisgroup is 226.6. The case worker must decidewhether to admit Clients E, F, G, and H or limitthe number admitted.

Also assume that a B/C ratio of 200 is selectedas a performance indicator. Figure 3 shows thatadmitting all four new clients into the programwill lower the average B/C ratio for this caseworker to 178.06. If 200 is a guideline to be fol-lowed, all four clients cannot be admitted to theprogram. The effect on the average B/C ratio ofadmitting the various clients in different mixes isshown in the Matrices A and B.

If only client E is admitted into the program(Matrix A), the case worker's average B/C ratiowill drop to 196.12. In reviewing Matrix A, it canbe seen that if clients G and H are admitted to theprogram, the average B/C is 209.22. According tothe B/C performance guidelines, this is accept-able. With a required B/C average of 200, thiscase worker only has the following choices: admitclient F, alone; admit client G, alone; admit cli-ents G & H; and admit client H, alone. These arethe only combinations of one or two client admis-sions that keeps the B/C ratio above 200.

Matrix B in Figure 3 illustrates the effect on theaverage B/C ratio of admitting any combinationof three clients. For example, in admitting clientsE, F, and G, the average B/C ratio after admit-tance is 179.61. In all combinations of three cli-ents, the average B/C ratio remains below 200 af-ter admi t t a nc e. The re for e, to meet therequirements of a 200 B/C ratio, the selection ofthree clients is not an acceptable alternative.

It should be noted that a B/C ratio of 200 as acutoff was only an illustration of how to use B/Cratios as a performance measure. A B/C rat iolower than 200 would have entirely different re-sults. This evaluation procedure can be applied to

government agencies that must decide betweenservice programs or capital expenditures. B/Cperformance indicators are recommended for useat all managerial levels in evaluating governmentexpenditures.

A Signal for Corrective Action

Our study suggests that B/C ratios can be usedto evaluate performance and monitor governmentexpenditures against returns.

According to Peter F. Drucker, "...much ofwhat we now consider 'expenditure'or 'socialoverhead' is actual ly 'capit al investment' andshould — perhaps must — produce a high returnand be self - financing." Although he relates thesethoughts to "information technology," the idea of"social overhead" is equally applicable to the gov-ernmental output and returns.

The advantages of B/C ratios as performanceindicators are:

• As a performance measure, a B/C ratio can en-courage lower levels of management to try andachieve goals set at higher policy levels.

• The use of a B/C ratio provides for a broaderperspective of the objectives of government pro-grams and encourages managers to consider theidea that spending should be at least self -sustaining.

• The B/C performance indicator simplifies com-parisons among programs where results may berecorded in diverse measures such as tons, cli-ents, or forms filed.

• The B/C performance indicator has the poten-tial for stability over time.

• Information needed to compute the ratio isreadily available.

• Generally, the ratio is considered to be a mea-sure of efficiency becausb it focuses on output/input. However, it also can be a valuable mea-sure of how effective managers have been inachieving policy guidelines.

We are not suggesting that the B/C ratio re-place all other measures of performance or evalua-tion. Rather, this technique should be used tocomplement other measurements already in place.B/C analysis can help ensure that at the very leastorganizations are achieving a minimum level ofquality. It is important to determine the return re-ceived on expenditures. If a negative return exists,it does not necessarily mean that a program mustbe eliminated, but it may signal the need for cor-rective action.

'This is calculated by solving for X in the following equation:

555.49 + X(69.2) = 150X + 1

Thismanagementaccountingtechniqueshould be usedto complementotherperformancemeasurementsalready inplace.


AccountingEducationNorman O. Schultz and William C. Kilpatrick, Contributing Editors

More NAA Student Chapters Needed

Accounting programs, faculty, and ad-ministrators are failing to provide allaccounting students with equal accessto nonacademic, but nevertheless im-portant, university- sponsored profes-sional development experiences.These experiences include: makingprofessional contacts, receiving careerinformation and guidance, learningfrom various student leadership oppor-tunities, developing a sense of profes-sional ethics, and sharing in the con-tinuing educational opportunitiesavailable to practitioners.

Some accounting departmentshave adopted a policy of sponsoringonly one student organization. Usuallya chapter of the national accountinghonorary and professional society,Beta Alpha Psi, is established for thebenefit of students. Beta Alpha Psiserves a dual role as both an honorand a professional society. Its goalsinclude recognizing and promotingacademic excellence and serving theuniversity and community, as well asthose professional growth goals nor-mally associated with professional so-cieties. Membership in an honor soci-ety is by definit ion and by practicerestricted to those students who haveexcelled academically. This practiceraises a moral issue that needs to beresolved: namely, is the exclusion ofsome students from full participationin professional development activitiesethical, and if not, what should bedone to rectify the situation.

We studied the practices of 42 aca-demic departments at Colorado StateUniversity, and found that most de-partments followed one of three strat-egies: sponsoring only an honor soci-

ety, only a professional society, or atleast one student organization ofeach type. Approximately 19% of thedepartments elected to follow thesame course of action as the ac-counting department, that is to spon-sor one student group having as amembership criterion a minimumgrade point average, in other words,an honor society. When we reviewedthe goals of this group we found thatthe majority emphasized the tradition-al honor society objectives of encour-aging and recognizing academicachievement and providing service tothe university or community. Thegoals of the Beta Alpha Psi chapter,with its strong emphasis on profes-sional development programs, wereclearly out of step with the rest of themembers of this particular portion ofthe academic community.

We also learned that 38% of thecases where departments sponsoredonly a professional society with nograde restrictions to membership, theorganization's objectives were likely tobe clearly limited to providing profes-sional development opportunities forthe student. To a great extent their ob-jectives mirrored many of the goals pur-sued by student chapters of Beta AlphaPsi. The major differences were theopen membership policy and reducedemphasis on academic achievement.

Interestingly, when a departmentsponsored both a professional and anhonor society, the agendas of bothorganizations included professionaldevelopment concerns. Thus, stu-dents who were not honor societymembers are provided with an alter-nate source of nonacademic profes-

sional experiences, and the entirestudent body is well served.

Is There a Problem?Some might answer there is no

conflict to be resolved because bothof the chapter's broad goals are de-sirable, and sponsorship of only onestudent group can fill both of theseneeds. Furthermore, the professionaldevelopment programs presented byBeta Alpha Psi can be opened to allstudents whether they are membersof the chapter or not. If an open ad-mission policy is followed, and no oneis deprived of the opportunity to at-tend professional meetings, the prac-tice is not discriminatory.

On the other hand, there are somepowerful arguments that support thecontention that as long as there areno alternative sources of nonacadem-ic professional development activi-ties, the exclusion of a large portion ofthe student body from the full benefitsof membership is not proper. Mem-bership is, after all, a prerequisite forfull participation including the oppor-tunity to advance in the organizationto a position of leadership.

There also is the argument thatmany students will not avail them-selves of the opportunity to attend themeetings of an organization in whichtheir membership had been denied,regardless of how helpful or enlight-ening that experience might be.Based on our limited experience, webelieve only a small percentage ofstudents ineligible for membershipcurrently attend Beta Alpha Psi meet-ings on a regular or even a sporadicbasis. Yet, these are the very stu-dents who most need help in improv-ing skills, establishing strong ties tothe profession, and developing agreater commitment to their studies.

Weighing the pros and cons, webelieve that in many cases account-ing educators are not acting in thebest interests of the student body asa whole. In fact, it is ethically wrong torestrict in any way a student's oppor-tunity to develop professionally solong as he or she possesses the req-uisite skills to make the most of thatopportunity. Clearly a student mustdemonstrate an acceptable level of

0 6 9


Restoring Public Confidence in_....a.Government Contractors

Almost every day it seems, we read or hear anoth-er "horror "story about alleged irresponsible con-duct by government contractors. Because thefunds involved are tax money, is it any wonderthat the taxpayers —the real "customers" of gov-ernment contractors —are in an uproar.

The situation is exacerbated in the defense envi-ronment because extremely large amounts are in-volved and the value of defense expenditures con-tinues to be a controversial public issue. As aconsequence, laws and regulations are placingtighter constraints on cost recovery under govern-ment contracts and calling for more governmentsurveillance.

In response to the public outcry and these newconstraints, industry representatives are increas-ingly speaking out against the lack of opportunityfor free enterprise and profits in doing businesswith the government. Yet, business leaders com-monly acknowledge that the opportunities forsubstantial revenues and relatively high return oninvestment continue to exist in government con-tracting. Thus, it seems that the real problem is


Government contractors

customers they serve.As a federal auditor, I believe that the way out

of the existing controversy and lack of trust is foreveryone involved to focus upon those fundamen-tal measures which always have been successful inproviding a basis for reliance in the business envi-ronment. The measures I have in mind are thosechecks and balances provided by strong systemsof internal control.

While there are many facets of the governmentcontracting process —all of which may contributeto the strengths and weaknesses of the process —Iam going to focus here on actions of the compa-nies performing government contracts and theconcerns of government auditors reviewing costcharges to the government by those companies.

What Is the DCAA?

The Defense Contract Audit Agency (DCAA)provides the auditors in the federal governmentcontracting environment. It is an important ele-ment of the government's system of internal con-trols in the contracting process. The DCAA mis-sion is to perform all necessary contract audits for

Fred J. Newton, CPA,is deputy director ofthe Defense ContractAudit Agency. He is amember of theWashington (D.C.)Chapter, through whichthis article wassubmitted.

51

the Department of Defense, and provide account-ing and financial advisory services regarding con-tracts and subcontracts to all DOD componentsresponsible for procurement and contract admin-istration. DCAA also provides audit services tomore than 20 non -DOD government agencies. Byspecial agreement, DCAA also provides contractaudit and financial advisory services to allied na-tions who purchase United States- produced de-fense supplies and equipment. Essentially, DCAAdoes almost all the contract audit work at com-mercial companies for the federal government.

While DCAA does perform tests of contractorsystems of internal control and relies upon effec-tive systems in establishing the scope ofcontractcost audits, it cannot assume control or responsi-bility for those systems. Professional accountingliterature has clearly acknowledged that the estab-lishment and maintenance of a system of internalcontrol is the responsibility ofmanagement. Thesystem ofinternal control must be under continu-ous supervision by management to ensure that it isdoing the job intended.

Internal controls are integrated systems of poli-cies, people, record keeping, and monitoring pro-

about preventive procedures.The system of internal control also needs to in-

clude measures that will provide an environmentconducive to proper conduct and honorable rela-tionships with customers. In other words, a pro-gram directed toward integrity is an important el-ement ofa system ofinternal control.

Why Internal Controls Are Important

The lack of effective internal controls is often amajor factor in government contract mischargingand other abuses that are uncovered by DCAA.Adequate internal controls are essential if the con-tractor's records are to be relied upon for cost re-imbursement or contract re- pricing under govern-ment contracts. In addition to contract costing,adequate internal controls are essential to ensurethe reliability of historical data used for estimat-ing future effort and the way that estimates andprice proposals are prepared.

Internal accounting controls safeguard the con-tractor's physical and monetary resources. In ad-dition to accounting controls, a wide spectrum ofadministrative controls also are needed. Adminis-trative controls have a significant impact on the

Some contractors deny access to informationthat government auditors need.

cedures that serve to prevent or detect departuresfrom established policies and procedures, activi-ties which have not been properly authorized, andactivities that undermine the achievement of orga-nizational goals and objectives. The governmentcontractor's administrative and accounting inter-nal controls should provide for: safeguarding ofcompany assets, reliability of financial records, asystem ofauthorization and approvals, and an or-ganization plan with all the necessary methodsand procedures to promote operational efficiencyand assure adherence to prescribed managerialpolicies.

Implementation of effective control procedureshelps managers know what and where their mone-tary and physical assets are at all times; know howthey are being dispensed and disposed of and forwhat purposes; know that such purposes are au-thorized; and know that pilferage, embezzlement,or other forms of misappropriation by employeesand outsiders can be effectively deterred and de-tected. Because any losses arising from theseevents would affect the costs of performing con-tracts, the government auditors are concerned

quality of internal accounting controls becausethey affect the control environment.

I will use labor costs — usually the most signifi-cant cost category in the performance of govern-ment contracts —as an example of where internalcontrols are particularly important. Also, labordollars often are the single largest element of costin the bases used to allocate indirect costs, and in-curred labor costs often form the basis for estimat-ing costs for future contracts. And, unlike otheritems of cost, labor is not supported by externaldocumentation such as an invoice, purchase or-der, or other receipt or physical evidence to pro-vide an independeni check or balance.

It is therefore imperative that government con-tractors establish and maintain a sound system ofinternal control over the labor- charging function.The primary record in most timekeeping systemsis the time card or other type of entry prepared byindividual employees. The key link in any soundlabor time - charging system is the individual em-ployee. It is critical to a labor- charging internalcontrol system that management fully indoctri-nate employees on their independent responsibil-


ity for accurately recording time charges.To be effective, the internal controls over labor

charging should meet the following criteria:

• Operating responsibilities must be segregatedfrom other functions that act as checks and bal-ances on accountability. For example, manag-ers must not have the ability to manipulate timecharges to match their budgets.

• Procedures must be evident, clear -cut, and rea-sonable so there is no confusion concerning thereason for controls or misunderstanding as towhat is and what is not permissible.

• Individual employees must be made aware ofcontrol s that act as an effective deterrentagainst violation, including the legal penaltiesfor false claims under government contracts.

• Maintenance of controls must be continuallyverified and violations must be remediedthrough prompt and effective action whichserves as a deterrent to prospective violations.

Maintaining an adequate system of internalcontrols is a challenge that will always face gov-ernment contractors and should always be a con-cern to top management. There is not and nevercan be a complete agreed -to list specifying all ofthe data and information that may be required foran adequate system of internal control under ev-ery conceivable set of circumstances. However, asystem which depends on the competence and in-tegrity of personnel, the independence of their as-signed functions, and their understanding of pre-scribed procedures should assure a properenvironment is maintained. Internal controls re-quired in any specific situation must be deter-mined by management and be sufficient to pro-vide reasonable assurance that the cont ro lobjectives will be achieved.

A critical factor affecting the control environ-ment is the "attitude" of senior management of acompany toward the importance of internal con-trols. If top management shows no interest in de-veloping and maintaining an appropriate controlenvironment, or contributes to its deteriorationthrough indifference, it is likely that previouslywell developed and documented internal controlsystems will quickly become ineffective. This isalso the likely result if management does not im-plement an appropriate control monitoring proce-dure through the use of an effective internal auditprocess, periodic management reviews, or a com-bination of these methods.

A Better Balance

I believe that contractors should try to achievea better balance between their primary objectiveto maximize profits and the objective to satisfygovernment contractual obligations. Of course,

Able Corp. —an Ideal' Government ContractorAble Corporation, a large multisegment corporation having exten-sive commercial and government business, has not been the subjectof publicized "horror stories." Able Corporation has successfullyapplied its expertise in gaining cost - reimbursement defense con-tracts for research and development of new military products,fixed -price defense contracts for production of accepted results ofits developments, and commercial application of some aspects ofthe developments. Its profits have reflected both the results of apositive attitude toward the needs of its customers and efficientoperations.

An effective system of internal controls is maintained by AbleCorporation. In addition to the normal system of separation of du-ties and supervisory controls, an internal audit function serves toassure that company policies are implemented. Government audi-tors are invited to participate with the internal auditors in planningand conducting floor checks of timekeeping procedures, providingbroader coverage, and accomplishing the objectives of both. Thetwo audit organizations also periodically perform work samplingobservations together, testing the efficiency of operations. The ob-servations occasionally identify means of changing operations to re-duce costs. This practice enables Able Corporation to be more com-pet itive in seeking future government cont racts , and thegovernment benefits from lower charges to cost - reimbursementcontracts and lower prices on future production contracts,

Able Corporation maintains a "hot line" system in which em-ployees are encouraged to call the internal audit department anony-mously when there is suspicion that company policies are not beingimplemented or that a fraudulent or other unlawful act has oc-curred. Internal auditors investigate the "hot line" allegations. Lawenforcement officials are invited to participate where a crime is al-leged. A controlled record of the calls and follow -up action is main-tained and made available to the government auditors. This servesas an important internal control function and demonstrates to thegovernment the integrity of the company.


the two objectives are not mutually exclusive.Nevertheless, there is a commonly shared percep-tion by the media, the Congress, and the publicthat some contractors' emphasis in recent yearson profits might have contributed to neglect oftheir contractual obligations at the expense of thetaxpayers.

Responding to these public concerns, the gov-ernment has established initiatives to prevent im-proper charges. For example, in March 1985 De-fense, Secretary Weinberger establ ished arequirement for contractors to certify that indirectcosts comply with regulations applicable to thecontracts. False certification can lead to perjurycharges.

This action demonstrates the growing recogni-tion that there is a need to re- balance the contrac-tor's responsibilities for valid cost submissionsversus the government's responsibilities for reviewand audit. The certification requirements are in-tended to encourage the contractor's managementto accept personal responsibility for the adequacyof its cost representations to the government. It isexpected that contractor management will devel-op internal controls within the company to estab-

tractor estimating systems would help both con-tractor and government managers to:

• Assess the extent of reliance that can be placedon the internal contro ls of the est imat ingsystem,

• Determine consistency in application of esti-mating methods and techniques, and

• Assure trackability of proposed costs factors tohistorical data where that is appropriate.

Restoring public confidence in government con-tracting is a multi -step process. Once a strong sys-tem of internal controls is established, contractorsnext need to assure that the contract auditors areaware of the strengths of the system. While theattitude of senior management of a company to-ward the importance of internal controls affectsthe control environment, the attitude of the seniormanagement of the contractor is also the key tohaving good relations with the government audi-tor. By "having good relations," I mean maintain-ing a basis for mutual trust.

It is an established DCAA policy to hold peri-odic conferences with a contractor's senior man-

Disagreements over sensitive contractor information are a natural partof the contractor - government relationship.

lish, monitor, and improve control systems in or-der to fulfill its personal responsibility.

The soundness of contractors' estimating andproposal preparation systems is also being givenconsiderable attention in today's procurement en-vironment. The added emphasis stems in partfrom the belief —right or wrong —that many ofthe recent spare - parts - pricing problems werecaused by deficiencies in estimating and pricingsystems. Certainly, the procedures established forestimating costs require effective internal controls.

I believe that contractors who frequently sub-mit large noncompetitive proposals should main-tain a complete written description of their esti-mating system. The internal controls over theestimates and proposals should be clearly defined.Requiring the contractor to include a statement ineach proposal indicating that it was prepared inaccordance with the described proposal prepara-tion system would help avoid misunderstandings.

System improvements along these lines wouldprovide both the contractors and the governmenta means of avoiding problems in the future. Forexample, better controlled documentation of con-

agement to promote free and open discussions be-tween the audi tor and the contractor. Thesemeetings cover current items of common interest,technical problems, and working relationships.The objectives are to identify and resolve commonproblems, avoid duplication between internal andgovernment auditors, and improve and resolveproblem areas. Contractors are encouraged to ini-tiate such a conference with DCAA representa-tives in particular to explain their systems of inter-nal control.

Ironically, some contractors have gone to greatlengths establishing strong systems of internalcontrol which could be relied upon by governmentauditors, then deny access to information suffi-cient for the government auditors to accept thesystems. This not only detracts from opportunitiesfor trust but also stimulates suspicion and dis-agreements about the effectiveness of the contrac-tor's management practices.

Disagreements, which are inherent to any envi-ronment where an external reviewer is examiningand evaluating the performance of another, willoccur over access and related requirements of the


audit process. These disagreements may involvecomplex issues or information deemed extremelysensitive to the contractor's management. This isthe natural course of contract auditing. I would bethe first one to admit that the courtship betweengovernment auditor and contractor cannot alwaysbe a smooth one. When a contractor submits aproposal based on costs, however, or enters into acontract in which the government agrees to paybased on what it costs to perform, that contractoralso has invited the government auditors into itsplants and offices to observe all activities and doc-uments that affect those costs.

An effective working relationship between thegovernment auditor and the contractor is neces-sary. In order to make it a mutual benefit, there isa need to eliminate time - wasting arguments overthe government auditor's right for free access tocontractors' data, facilities, employees, internalaudit plans and results that relate to governmentwork. While the government auditor certainly hasno right to peruse business documents which haveno connection with government contract costs, heor she has a right to satisfaction that itemsclaimed are a legitimate part of costs of perform-ing the government contracts.Some contractors are concered that contractor

proprietary data revealed to the government audi-tor in the course of official duties will somehow bedisclosed to unauthorized persons. The DCAApolicy is clear on this — audits are to be performedin such privacy as may be warranted under thecircumstances and all necessary safeguards of con-tractor- confidential data will be provided. ThePublic Law (18 USC 1905) also makes govern-ment employees liable to criminal prosecution forinappropriately divulging contractor proprietaryinformation. Such information is also exemptfrom Freedom of Information Act disclosure.

Restoring public confidence in government con-tracting cannot be done at the expense of drivingprivate enterprise out of the market. Profit mustbe encouraged when it is based upon productivityand successful contract performance. Workingsuccessfully and profitably with the federal gov-ernment is not an easy task, but it can be done.The results can be rewarding not only monetarily,but also emotionally —i. e., the satisfaction of hav-ing done something worthwhile for your country.

What Contractors Should Do

Here's what a person doing business with thegovernment should do to ensure successful results(the system of internal controls should addresseach of these points):

1. Make sure you understand the applicable regu-lations and laws before submitting a proposalfor a contract.

2. Establish procedures to make sure that all ofyour employees who will be involved with thecontract understand the regulations and lawsare to be complied with completely.

3. Do not compromise with the requirements inan attempt to cut costs. If you can't complyand make a profit, don't sign the contract.

4. Cooperate with government personnel respon-sible for ensuring that the requirements aremet. Recognize that they have a fiduciary re-sponsibility to protect the interests of taxpayers(including you). & 44. .

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� NQ9 � ,�

In conclusion, government contractors need toget their systems of internal control in order ifpublic confidence is to be restored. Their marketdemands it. Instead of acting to cause confronta-tions, their actions should be focused upon in-creasing the efficiency of operations and stimulat-ing integrity in the performance of employees.Accounting controls should ensure applicable ac-counting regulations are appropriately consideredin estimating costs for pricing proposals and in re-cording actual costs for billing purposes. Adminis-trative controls should ensure that good judg-ment, competence, and cooperative attitudestoward customer representatives prevail.

As government auditors find and report signifi-cant improvements in contractor systems of inter-nal control, I am sure that public confidence ingovernment contractors will be achieved. TheCongress and the media will be continuing to in-quire about government auditor observations, sothe opportunities to have good messages commu-nicated to the taxpayers will be available.


Dow Opts for Less —and GainsIts accountants were churning out monthly financial reports that managers

spent hundreds of hours analyzing. Were they really needed?

By Dennis Dankoski

n 1984, the Dow Chemical Com-pany made a bold and dramaticannouncement. It did not involve

a toxic substance, labor- managementnegotiations, a new product line, or atechnological breakthrough. Instead,the announcement centered around amore mundane, less controversial top-ic —the frequency of reporting internalaccounting and financial information.

Roger L. Kesseler, Dow vice presi-dent- controller, had first raised thequestion concerning frequency of pub-lishing accounting statements. The peo-ple who heard his comments initiallythought he was suggesting a reductionof another day or two in the monthlyclosing cycle. They were wrong. He hadsomething entirely different in mind.

To fully understand the environmentwhich nurtured his question, it's impor-tant to appreciate what has happened toDow since 1981. That year saw the startof a business downturn that began as arecession but later developed into a "de-pression" for the chemical industry. Tocope with the situation, severe financialcontrols were implemented, includingcurtailment of new capital for expan-sions, early retirement programs, travelrestrictions, and reductions in workingcapital. To fulfill management's needfor decision- making information, theaccounting system was enhanced to pro-vide consolidated financial reports forthe more than 200 domestic and foreignreporting divisions and subsidiaries bythe 8th working day following the closeof business of the previous month.

Great pride was taken in being able tocompress and integrate the accountingclosing cycle to the point that manage-ment could feel the pulse of current op-erations. This accomplishment did notcome easily. Each day cut from the clos-ing cycle required enormous effort not

only within the controller's function,but among other functions and systemsthat supply the accounting systems.

With the recession in the early '80s,the controller's functions, like otherfunctions within Dow, began to exam-ine ways to improve productivity andefficiency. In that examination, theprofit planning and budgeting processwas identified early on as a candidatefor improvement. Similar to the ac-counting closing cycle, the profit plan-ning cycle had been automated, but,nevertheless, it consumed many man -hours of effort. With management'ssupport, the profit planning cycle wasshortened and the entire effort stream-lined. Rather than recycling detailedproduct -level plans again and again,management guidelines were publishedand "back -of -the- envelope" plans (sum-marized estimates for discussion) wereused early in the planning cycle.

he adoption of common account-ing systems was examined as ameans of increasing productivi-

ty. Such a move would lead to improvedquality of information. Each locationhas accounting and computer servicesupport groups that function indepen-dently in the design and operation oftheir accounting systems, as long asthey conform to the company's ac-counting practices and standards. Thisindependence inherently leads to dupli-cate effort which is compounded by thenumber of sites and systems. To reducethis inefficiency, emphasis was placedon cooperation and coordination in theuse of all accounting systems. This com-mon systems effort has now been ex-panded from regional emphasis to glob-al coordination.

From this review, another idea germi-nated: to close "the books" less fre-quently in order to reduce the informa-tion flow rather than speed it up. Mr.Kesseler knew that with each improve-

ment in the closing cycle, more timewas being devoted to analysis of data;but he questioned whether too much in-ternal analysis was taking place. Werebetter decisions being made as a resultof faster information flow? Was the flow

Dow's MatrixManagement Structure

Products

GeographicAreas

of informat ion the most efficient?Should less frequent closings be consid-ered? If so, what about quarterly closing(publishing financial statements quar-terly rather than monthly)?

Actually, the idea of quarterly report-ing fit into a goal that Dow's president,Paul F. Oreffice, had expressed: to cutdown the bureaucracy within the com-pany. With each set of numbers comes alot of data studying, report writing,questions, excuses, more reports, morequestions. What better way to cut bu-reaucracy than to turn off the spigot —the monthly accounting closing whichgenerates an enormous amount of data.

With the support of the president,Mr. Kesseler started asking questionslike, "Why do we close monthly ?""Who needs the information ?" "How is


If your company solved a problem... Management Accounting readers would like to know about itl

the information used ?"To the first question, "Why do we

close monthly ? ", the answers rangedfrom "We always have!" to "We needthe data." The "need" for the data ledto questions about who wanted the dataand why they wanted it. Typical reac-tions included: "I have always gottenit "; and "I don't want my boss to askme something that I don't know about."

VIA hen the question of "Who real-

VVly needs to know and howmuch do they need ?" was ana-

lyzed, Dow's organizational structurecame into the picture. Dow's organiza-tion is made up of geographic responsi-bility, business responsibility, and func-tional respons ibility (such as thepersonnel department). A cube (see Fig-ure) best illustrates Dow's matrix man-agement structure. The geographic re-sponsibility divides the world into areas,areas into regions, regions into coun-tries, countries into sites, and sites intoindividual plants. In the geographicstructure, all activity regardless of busi-ness is the responsibility of an area pres-ident, regional manager, country man-ager, and on -s ite manager. On thebusiness side, Dow has global productmanagement groups . There are al sopeople in each geographic area whohave the same product -line responsibil-ity. Below the area level are regionaland country business alignment. Thefunctional dynamics of the Dow matrixorganization can be expressed as a dot-ted line authority within a function re-gardless of business or location. For in-stance, all accounting activity hasfunctional responsibility to the corpo-rate controller, but reports directly tothe line organizations.

With each monthly closing, detailproduct numbers were given to corpo-rate groups, areas, regions, countries,and sites, as well as business and func-tional managers. These data were ana-lyzed, reports written, questions asked,responses given. Questions could beasked by anyone in the global matrix or-ganization and frequently were.

Mr. Kesseler wondered whether thisflood of questions and analysis was real-ly necessary in a company that prideditself on pushing decision making to thelowest possible level. In reviewing

monthly reporting, we asked, "Are bet-ter decisions being made as a result ofmonthly information being collectedfrom and reported to the ent ireorganization ?"

The answer was clearly "no." Cer-tainly some data is needed by variouspeople, but it does not need to be cap-tured in detail and made available to theentire organization. Information, suchas plant inventories, is needed on a dailybasis. This information was available,and is still available, to plant supervi-sion through on -line computer systems.Another example is sales orders, whichalso continue to be available to market-ing personnel on an as- needed basisfrom a sales order system. Differentdata are necessary for managing differ-ent aspects of Dow's business. That datamust be available to those who need itin their decision- making roles.

In a presentation to the Dow manage-ment committee, Mr. Kesseler pointedout that the purpose of data is to:

• Provide management with timely, ac-curate, consistent, and meaningful fi-nancial data to follow the economictrends of the business;

• Meet the legal requirements imposedon t he compan y b y gove rnmentregulations;

• Establish the necessary financial in-ternal controls required to safeguardthe assets of the company.

e also spoke about the directand indirect cost of summariz-ing financial transactions of the

company into financial statements. Di-rect costs are those incurred in collect-ing data. These are primarily the con-troller's and computer services costs.Indirect costs are those costs outside thecontroller's organization which relate tothe preparing, questioning, communi-cating, analyzing, writing, and readingof reports. The indirect cost far out-weighs the direct cost. Combined, theseannual costs run into millions of dollars.

A number of alternatives were avail-able as possible answers to the reportingsituation.

To help make its decision, the man-agement group considered the advan-tages and disadvantages of adopting the

quarterly reporting procedure. If thepolicy was implemented, Dow employ-ees would get a strong message thatmanagement was serious about reduc-ing overhead in the company. The bur-den of "Dowization" (compliance withDow procedures and practices) wouldbe reduced for new and /or small com-panies. Daily /weekly control, on a needbasis, would be more heavily reliedupon at the operating levels. Redeploy-ment of resources to aid in the shift ofDow's product mix to specialty chemi-cals and services would be facilitated.

n the other hand, bootleg infor-mation systems might developthat would cost more in the long

run. An unacceptably high number of"surprises" could occur each quarter,and a large "OH -OH" might go unde-tected for a longer period of time.

The management committee optedfor corporate quarterly reporting. Toimplement that decision, PresidentOreffice asked all Dow employees to ex-amine their areas of operation and to in-fluence those things that could be im-proved upon. Mr. Oreffice, in hisannouncement to employees, capturedthe essence of the rationale behind quar-terly reporting: "The single complaintthat I hear most from employees is thatwe have too much centralization andthat this creates bureaucracy and a lotof work for all of you. Let us, by allmeans, not interpret this (quarterly re-porting) as saying that performance isany less important. What we are tryingto do is liberate you from a lot of paper-work so that your time can be betterspent in improving the Company'sperformance."

Two years have passed since Dowwent to quarterly reporting. Top man-agement recently reviewed its decisionand reaffirmed its commitment to quar-terly reporting. It is satisfied that costsavings have been effected, and the rnes-sage on bureaucracy was heard. It was arisk to go counter to the trend of gettingmore and more information, but thecorporate goal was productivity —notconvention. 11

Dennis Dankoski is the manager ofCommon Accounting Systems for DowChemical Co.


New MAP StatementExplains Purpose of SMAs

Management Accounting Practices Committee issues'Statement of Purpose and Operation'

Preface

TATEMENTS ON MANAGEMENT ACCOUNT -ing: "Statement of Purpose and Operation" was ap-

proved for publication by the Management Accounting Prac-tices Committee of the National Association ofAccountants(NAA) at its meeting on March 25, 1986. The Statement isissued with the expectation that it will clarify the purpose of

Background

Since its founding (as the National Association of CostAccountants) in 1919, the National Association of Ac-countants (NAA) has been a pioneer in the evolution ofcost accounting and the broader scope of managementaccounting. The NAA has provided diverse educationalofferings and has sponsored an extensive research pro-gram resulting in publications that supply informationfor the management accounting profession.In 1969, the NAA created the Management AccountingPractices (MAP) Committee, its senior technical commit-tee, which was given two charges:

• To express the offi cial posit ion of the NAA on

Statements on Management Accounting (SMAs), their scope,and the process by which they are developed. The NAA pub-lishes SMAs to enhance the professionalism of managementaccountants and the education ofstudents ofaccounting.

Louis Bisgay, DirectorManagement Accounting Practices

accounting and financial reporting issues raised bystandard - setting groups such as the Financial Account-ing Standards Board, the Governmental AccountingStandards Board, the Securities & Exchange Commis-sion, and the International Accounting StandardsCommittee.

• To provide authoritative guidance to the membershipof the NAA and to the broader business community onmanagement account ing concepts , policies, andpractices.

3. Statements on Management Accounting (SMAs) are theoutgrowth of the MAP Committee's objective of furnish-


ing guidance on management accounting issues.

Statements on Management Accounting

4. The NAA has defined management accounting as "theprocess of identification, measurement, accumulation,analysis, preparation, interpretation, and communicationof financial information used by management to plan,evaluate, and control within an organization and to as-sure appropriate use of and accountability for its re-sources. Management accounting also comprises thepreparation of financial reports for nonmanagementgroups such as shareholders, creditors, regulatory agen-cies, and tax authorities" (SMA IA). The responsibilitiesassumed by management accountants in conjunction withthe activities in which they are engaged are significantand vary widely, given that management accountants arenot only providers of information but also full partici-pants in the management process. The body of knowledgefor management accountants does not remain static, andmanagement accountants frequently confront new chal-lenges in their roles as managers and reporters.

5. Recognizing those challenges, the NAA decided that aneed exists for authoritative guidelines that would helpthe management accountant fulfill his or her responsibil-ities. The guidance would take the form of (a) a recom-mended approach to dealing with an issue, (b) suggestedalternative approaches to solving a problem, or (c) usefulreference material.

Scope and Application of SMAs

6. Responsibility for identifying appropriate topics and su-pervising the development of SMAs lies with the MAPCommittee's Subcommittee on MAP Statement Promul-gation. One of the Subcommittee's first acts was the de-velopment of a Framework for Management Accountingon which to base the scope of the Subcommittee's workprogram. The Framework for Management Accountingcomprises:

1. Objectives2. Terminology3. Concepts4. Practices and Techniques5. Management of Accounting Activities

As implied by the term "guideline," Statements on Man-agement Accounting are nonbinding. But although noone is obliged to adhere to their recommendations, a widedegree of support is expected. To a large extent, this ex-pectation is based on the authority attributable to thequality of membership on both the MAP Committee andits Promulgation Subcommittee — members are recog-nized leaders in industry, public accounting, and aca-deme, with the majority from industry. Support for theStatements also will stem from the rigor of the develop-mental and exposure processes.

Developmental Process

8. As noted in the foregoing section, the Subcommittee

identifies appropriate topics and monitors developmentof SMAs. Suggestions for new projects come from vari-ous sources in addition to Subcommittee members, in-cluding NAA staff. Projects placed on the Subcommit-tee's agenda must be approved first by two - thirds of themembers of both the Subcommit tee and the MAPCommittee.A member of the Subcommittee accepts the responsibilityof monitoring the progress of each Statement, the draft-ing of which generally is done by an external consultantor by NAA staff. The person who drafts a Statementmakes use of research performed specifically for the pro-ject or research results that are available already. Pro-gress toward completion is carefully scrutinized by theSubcommittee monitor. A draft Statement is brought be-fore the Subcommittee only on the recommendation ofthe monitor.

Exposure Process

10. When a majority of the Subcommittee members presentat a meeting believe that a draft is ready for exposure toothers, the draft is transmitted to members of two adviso-ry panels. One panel is composed of a representative sam-ple of NAA chapter presidents or other chapter represen-tatives. The constituency is rotated annually. The otherpanel consists of nominees of other organizations havingan interest in accounting, such as the American Instituteof Certified Public Accountants, Financial Executives In-stitute, American Accounting Association, and the Soci-ety of Management Accountants of Canada. Members ofthis panel are changed at the option of the sponsoringorganization.

I1. The Subcommittee reviews all comments received frompanelists and makes whatever modifications seem appro-priate. The draft SMA, as modified, then is submitted tothe MAP Committee for its approval. The MAP Com-mittee will (a) approve issuance unchanged, (b) approveissuance after modification, or (c) return the draft to theSubcommittee for further development. When the MAPCommittee does approve issuance of a Statement by atleast a two - thirds majority, the Statement is published bythe NAA within the series of Statements on ManagementAccounting and is reprinted in the NAA's official jour-nal, MANAGEMENT ACCOUNTING.

12. The NAA makes SMAs available based on the belief thatthey will represent positive contributions to advancingthe profession of management accounting. The Associa-tion is interested in enhancing the usefulness of the seriesand therefore solicits comments about Statements issuedand suggestions for new topics from members and others.Correspondence related to Statements on ManagementAccounting should be sent to:

Director, Management Accounting PracticesNational Association of Accountants10 Paragon DriveP.O. Box 433Montvale, N.J. 07645


National Association of AccountantsManagement Accounting Practices Committee

1985 -86

ChairmanBernard R. Doyle

General Electric Company

Raymond H. Alleman William J. Ihlanfeldt Arthur D. Lyons Edward W. TrottITT Corp. Shell Oil Co. FMC Corp. Peat, Marwick, Mitchell & Co.

Robert N. Anthony Eugene H. Irminger Allen H. Seed, III Robert G. WeissHarvard Business School Centel Corp. Arthur D. Little, Inc. Schering- Plough Corp.

Patricia P. Douglas James J. Latchford Norman N. StraussUniversity of Montana W. R. Grace & Co. Ernst & Whinney

Subcommittee on MAP Statement Promulgation 1985 -86

ChairmanAllen H. Seed, III*

Raymond H. Alleman* Richard A. Curry Arthur D. Lyons* J. Charles StracuzziThe Coleman Co. Blount AgriProducts Group

Robert N. Anthony* Robert A. Howell Daniel McBride Donald J. TrawickiNew York University Honeywell, Inc. Touche Ross & Co.

*Also a member of the MAP Committee

NAA Staff

Louis Bisgay, Director,Management Accounting PracticesJonathan B. Schiff, ,Vanager, Management Accounting Practices

Order Form for Statements on Management Accounting

❑ SMA Statement of Purpos e and Operation $5.00

This Statement sets forth the purpose of Statements on Management Accounting and explains their scopeand developmental process.

Other SMAs Available❑ SMA 1A Definition of Management Accounting $ 5.00❑ SMA 1B Objectives of Managem ent Accounting 5.00❑ SMA 1C Stand ards of Ethical Conduct for Management Acco untants 5.00❑ SMA 2 Management Accounting Terminology 10.00❑ SMA 4A Cost of Capital 5.00❑ SMA 4B Allocation o f Service and Administrative Costs 5.00❑ SMA 4C Definition and Measurement of Direct Labor Cost 5.00❑ SMA 4D Measuring Entity Performance 5.00Pleas e check SMAs des ired and enclos e a check for the total amount.Mail to NAA, Special Order Dept., Montvale, NJ 07645 -0433.

Name (please print or type)

Company (if part of shipping address)

Mailing Address

City, State, Zip MAP 6/86


In the LibraryMembers may borrow the books listed inthis section by telephoning M. Redrick,(201) 573 -6235.

The Money Go RoundLawrence A. Krause, Consolidated Capi-tal Group, Inc., 2000 Powell Street,Emeryville, Calif. 94608, 1985, 202pp. —It's difficult keeping up -to -datewith new financial products and chang-ing tax and economic scenarios, butLawrence Krause tells you how in hislatest book, The Money Go Round. Hisexpertise, backed by 20 years of experi-ence as a financial planner and adviser,will take the mystery and fear out ofwhat you can do with your money. Theauthor's goal is for readers to achieve fi-nancial peace of mind, to know how toplan, to be more confident —and keepoff "the money go round." Mr. Krauseprovides the framework and perspec-tives for readers to use to understand fi-nancial opportunities.

He defines financial planning as aconscious, planned process and suggeststhe hardest part is getting started. Whenestablishing a personal investment pro-gram, he advises, keep in mind yourage, diversification, liquidity, taxes, andrisk. A well- organized approach in-cludes gathering thoughts and goals,considering how to achieve goals, pre-paring a list of investment assets and li-abilities, deciding how to move from to-day's goals to new goals, looking forweaknesses in the plan, believing inyourself, and, finally, acting now—thesooner you begin, the sooner you'll befinancially independent. He plots fourfinancial strategy situations for fourstages of life.

This well- written book explores fi-nancial options from safe to super risky.Some include estate planning (an areano one likes to talk about), retirementplanning, IRAs, Keogh plans, risk plan-ning, purchasing a home, investments,stocks, bonds, and CDs, to name a few.Did you know that "more than 70% ofthe population (60 million people age 50or older) approach retirement with nopreparation ?" One cannot depend on in-heritances, gifts, or luck. Preparing andplanning are necessary, and this book

offers much assistance. Mr. Krause alsois a speaker at NAA's Annual Confer-ence in Nashville.Kim Serocke

The CFO's HandbookRichard F. Vancil and Benjamin R. Ma-kela, eds., Dow Jones- Irwin, Inc., 1818Ridge Rd., Homewood, Ill. 60403, 1986,616 pp. —This may well be the singlebest financial handbook available. Pro-viding a top management perspective —the authors are almost uniformly prac-ticing chief financial officers —the vol-ume truly meets its objective of being "acompendium of state -of -the -art prac-tices ." NAA President Herbert C.Knortz was a member of the editorialadvisory board, and one of the authors.Raymond Alleman, senior vice presi-dent and comptroller of ITT Corp., is aLybrand Gold Medal winner and amember of NAA's Management Ac-counting Practices Committee.

While most handbooks are designedto be used as reference tools, both thesubject matter and the writing style ofthis volume suggests that many NAAmembers could benefit from a straight-forward reading. For example, in achapter on "Developing Financial Man-agers," the authors note that: "moreand more companies are also encourag-ing financial employees to earn the Cer-tificate in Management Accounting, of-fered by the Institute of ManagementAccounting [now Institute of CertifiedManagement Accountants]. As of mid -1985, more than 5,000 individuals heldthe CMA with the number growing10% annually. To help their employeesto benefit from the CMA approach, anumber of large companies have tai-lored internal programs to fit their owntraining /development needs. DuPontestimates that the cost [of a CMA re-view program] is equal to enrolling em-ployees in regular college courses andfeels the program is effective." [p. 488]Note that the authors of that chapterare associated with General Electric andInternational Paper.

Whether you want to read about pub-lic disclosure requirements from JosephConnor, chairman of Price Waterhouse

Miriam Redrick and Stan Stec, Editors

& Co., or income tax planning fromJames Denny, CFO of G. E. Searle &Co., or organization for financial man-agement by William S. Cashel, chair-man of Campbell Soup, this volume ishighly recommended. Unlike hand-books in which the various chaptersseem to have been brought together al-most at random, this volume is tightlyedited and closely coordinated.Alfred M. King

Cost and Management Accountancy,Methods and TechniquesArun Prasad Roy Chowdhury and Ami-tava Bhattacharyya, New Central BookAgency, Calcutta, India, 1986—The au-thors provide a comprehensive reviewof cos t and management accountingpractices and techniques. The volume isunique to the extent that it synthesizeshandbook style with dozens of compre-hensive fully worked -out exercises andproblems reflective of a textbook thatresults in an interesting and usefulhybrid.

The problems included in the bookare directed to the content of several in-ternat ional examinations includingthose of the Institute of Chartered Ac-countants of India and the Institute ofCost and Management Accountants ofEngland. The volume seems to be an ex-cellent desk reference for persons inter-ested in developing the management ac-counting profession or those who arecurrently involved in the profession andneed a comprehensive source of stan-dard pract ice guidance of a routinenature.Jonathan B. Schiffff

Closing Plants: Planning andImplementing StrategiesCoopers & Lybrand, Financial Execu-tives Research Foundation, 10 MadisonAve., Morristown, N.J. 07960, 1986, 71pp. — "A plant closing is a complexevent that can have very negative effectson a company and its employees... yet,very little has been written on how acompany might deal with the issues."Not surprisingly, the researchers foundthat most financial officers they inter-viewed "agreed that effective planning

MANAGEMENT ACCOUNTING /JUNE 1986 B1

is the key element to mitigating the ad-verse effects of a plant closing." Theysaid that assembling a task force was aneffective way to implement the processand "assure that all areas of potentialrisk were considered." The desirabilityof telling employees that a plant closingwas possible ranked high. After a finaldecision is made, the informationshould be communicated no less thansix months before the actual closing.

The researchers provide a good sum-mary of the relevant financial reportingrequirements including a discussion ofthe measurement data, components,gains or losses, and method of financialpresentation. As the authors state intheir executive summary, there are noeasy solutions to the problems involvedin a plant closing. "No matter how wellit is handled, there will likely be someadverse effects... "

Any corporate financial officer likelyto be involved in a plant closing wouldbe advised to acquire a copy of this im-portant research study.A M K

The Electronic MailboxIra Mayer, Hayden Book Co., 10 Mul-holland Drive, Hasbrouck Heights, N.J.07604, 1985, 193 pp. —NAA recentlyadopted Western Union's Easylink Sys-tem. It appeared to be a means of lower-ing communication costs. A brief reviewof NAA's high expenditures for over-night courier services, such as FederalExpress, suggested that computer -to-computer electronic transmission couldsave money for brief, highly importantmessages. So far, the potential is stillthere, but the ultimate savings have yetto be realized.

A review of this book suggests why.The author provides separate chaptersdescribing electronic mail systems of-fered by MCI, RCA, ITT, ADP, GTE,Western Union, plus at least three infor-mation utilities including "The Source"and "Compuserve." Each of these ser-vices differs in price, flexibility, features,and the like. The services also differ informat. Thus someone who has learnedto use MCI mail would have to start allover again with Easylink, and both us-ers would have to learn the ins and outsof ITT Dialcom.

For a brief overview of the benefitsand problems of each of these electronic

mail systems, Mr. Mayer's book is anoutstanding basic reference tool. Thereis little doubt that potential savings formost firms are substanti al, and thisbook will help the reader evaluate thatpotential and choose from the many op-tions available. Turning the potentialinto reality remains the real challenge.If everyone adopted the same service,everyone could save. As it is, the marketis too fragmented. This book describes,all too vividly, what is happening.AM K

A Buyer's Guide to MicrocomputerBusiness SoftwareArmanda C. Hixson, Addison- WesleyPublishing Co., Inc., Reading, Mass.01867, 1984, 292 pp.— Thinking of buy-ing software? With the enormous num-ber of computers and software on themarket today, one can easily becomeconfused and discouraged. The first stepis to define your needs and rank priori-ties, considering company, staff, and de-partment requirements. Next, evaluatemanual tasks currently performed.

Accounting packages range from gen-eral ledger to very complex systems,making it difficult to know about allsoftware. "If the software is well re-ceived in reviews, has a good track re-cord, and does what the manufacturerclaims, there is a good chance it will runon the machine you want to purchase."Armanda Hixson states, "Purchasingthe machine is secondary to finding thebest program for your particular appli-cation." The reasoning behind this ideais that commissions and incentives arelarger on higher - priced items such ashardware.

When shopping for software, ask thesalesperson to run it and tell you how toinstall and run the program. Also askabout available training, manuals, prod-uct warranties, and costs of updates.Read computer magazines to becomefamiliar with computer jargon. A buyermust be comfortable with the softwareselected and purchased. Do not useprice as your first priority— initial "sav-ings" could cost you down the road.

This book lists software products al-phabetically, including product descrip-tion, operating system formats, terminalconfiguration, supported hardware, andspecific performance measures.K S

Competing for Clients:The Complete Guide toMarketing and PromotingProfessional ServicesBruce W. Marcus, Probus PublishingCo., Chicago, Ill., 1986, 349 pp. —Fordecades the professions were forbiddenby their ethical standards to self -pro-mote. In 1978, in a landmark decision,the Supreme Court struck down thoseaspects of professional standards thatrestrained competition. Now accoun-tants, lawyers, consultants, and othersare allowed to advertise, to solicit open-ly one another's clients, or to competefor fees.

Many practitioners used to the moresubtle concept of "practice develop-ment" were caught unprepared for thenew era of aggressive marketing. Manyfirms tried to continue doing businessthe traditional way, looking askance atthe "unprofessional" behavior of com-petitors, but now, out of necessity, allfirms have joined the fray.

True to its title, this book is a "soup -to- nuts" guide to the marketing andpromotion of professional services. Mr.Marcus brings to bear his many years ofexperience as a marketing consultantfor both large and small accounting,law, and consulting firms and as a for-mer marketing executive at two of theBig 8 accounting firms.

He covers the topics of strategic mar-keting planning, goal setting, advertis-ing in all varieties of media, public rela-tions, proposals and presentations, andfuture trends in professional competi-tion. The appendices include a usefulglossary of printing terms and a sampledirect marketing program. Mr. Marcusaddresses the whys of marketing andpromoting professional services andthen supplies a wealth of specific detailon the hows. For example, in his chap-ter on publicity techniques, the authorpresumes the reader has little back-ground in the subject. He thoroughlyexplains the uses and abuses of publicityand then proceeds to provide in a veryreadable manner valuable insights intohow to use publicity to enhance yourfirm's reputation and market presencefor better competitive positioning.

Competing for Clients should be onthe shelves of all professionals seekingto help their firms.John E. Kane


Women ManagementAccountants

2 4 "looking for them."

Very few problems with managing home andfamily responsibilities were reported, which is un-usual considering the amount of time women arededicating to their work and the high percentageof married women with children. Either thesewomen are managing their households successful-ly or they are accustomed to not revealing this asa career problem for fear that it would be a deter-rent to further promotions.

One general accounting manager did expressconcern that her husband was not understandingabout the demands ofher job and the fact that shehad to travel from time to time. Another revealedthat her husband's refusal to relocate when shewas offered a transfer resulted in her eventuallylosing her job. A controller said she wished shecould find a company that demanded less over-time so she could spend more t ime with herchildren.

Moving On

The average number ofjob changes in the pastfive years for women in management accountingwas once or not at all. We asked them to tell uswhich of the following reasons would motivatethem to make a job move: to further personal ca-reer goals, more money, less travel, less overtime,new location, a better opportunity for promotion,increased travel, new challenges, spouse trans-ferred, or other.

Among the managers earning the lowest salary,$20,000- 29,999, more money was the most impor-tant factor for a job change followed closely by theopportunity to further personal career goals. Assalary levels increase, the importance of moremoney decreases. At the $50,000 level it ranksthird, with a better opportunity for promotion be-ing the number one reason to change positions;furthering personal career goals is second. Forthose earning between $40,000 and $49,999 themost important reason is to further personal ca-reer goals.

For those in the CFO category, "earning moremoney" i s number one unt il the salary rangereaches $50,000 and more per year. At that salarylevel it is the desire for new challenges and to fur-ther personal goals that would prompt a CFO toleave her current position. "New challenges" and"to further personal career goals" rank secondand third to the CFOs in the other salary ranges.Controllers at all salary levels, however, list newchallenges first, furthering career goals second,and more money third.

Profile of the Woman Management AccountantCompany Owner /President

Company presidents /owners represent 4% of the NAA sample re-sponding to the survey. Also included in the category are partnersof public accounting firms. Some statistics for the group are:

• 18% are 20 to 30 years old, 55% are 31-40, 27% are 41 -50, andnone are older than 51

• 45% are married• 45% have children• 45% earn more than $40,000 a year• 73% work more than 46 hours a week1055% hold college degrees, 36% hold undergraduate business de-

grees, and 36% hold advanced degrees. Only one person did notattend college.

Forty -five percent hold accounting degrees: 36 %, CPA, and 9 %,CMA. All work in small businesses (annual revenues under $20million), mainly public accounting or service businesses, and mostsupervise fewer than five people. The presidents have been in thebusiness world 10 -15 years and in their current position a medianof five years. Eighty percent belong to other professional organiza-tions in addition to NAA.

Chief Financial Officers

CFOs represent 14% of the total respondents. Also included in thisgroup are vice presidents of finance and directors of finance. Somestatistics for this group include:

0 23% are between 20 and 30 years old, 45% are between 31 and40, and 32% are over 40 years old.

• 73% are married0 57% have children• 87% earn more than $40,000 annually0 70% work more than 46 hours per week

Almost half the CFOs have either a master's degree in account-ing or an MBA. One has a law degree. Only one CFO did not at-tend college. Forty -eight percent have an accounting certificate(CPA, CMA, or CIA). Most work in manufacturing, nonprofit, orthe service industries, in small organizations (annual revenues un-der $20 million), supervising fewer than five people. The CFOshave worked in accounting/finance a median of 10 years.

Controllers

Controllers represent 40% of the respondents. Included in thisgroup are division controllers, corporate controllers, treasurers, di-rectors of finance, and assistant vice presidents. Some statistics forthe group are:

0 17% are between 20 and 30 years old, 48% are 31 -40, 21% are41 -50, and 14% are 51 and over

0 62% are marriedContinued on next page

MANAGEMENT ACCOUNTING/JUNE 1986 63

Profile (continued)

* 55% have children• 38% earn $30,000- 39,999 a year, and 41% earn more than

$40,000• 54% work more than 46 hours a week* 60 % hold college degrees, 45% with business degrees; 15% hold

advanced degrees; 11% hold associate degrees; and 16% attend-ed high school but not college.

Twenty -two percent hold accounting certificates: 21% are CPAs,and 1% are CMAs. Most work in small manufacturing or servicecompanies and supervise 5 -10 people. They have been in the busi-ness world 10 to 15 years, in their current position a median of 12years, and have made very few job changes other than promotionsin the last five years. Fifty -two percent have professional affiliationsin addition to NAA.

Managers

Managers represent 42% of the total respondents. Also included inthis category are plant accountants, assistant controllers, and inter-nal auditors.

Some statistics for this group:a 75% are 40 years old or youngerm 67% are married• 43% have children. 32% earn between $20,000 and $29,999 annually, 37% earn be-

tween $30,000 and $39,999, and 31% earn $40,000 or more.a

40% work in manufacturing® 50% work more than 46 hours per week.

How well educated are the managers? Thirteen percent did notgo beyond high school. Fifty -one percent have a bachelor's degreein business, and 17% have an MBA. There are 34 CPAs, threeCMAs, and one CIA among the managers. Sixty -eight percent have6 -15 years' experience in accounting and finance.

travel, less overtime, and spouse transferred areminor considerations for all groups. No groupwould change jobs in order to travel less often. Al-though 28% of the managers and 24% of the con-trollers would relocate if their spouses were trans-ferred, only 18 %n of the CFOs indicated that thiswould prompt them to leave their current employ-ment. Although 27% of the presidents wouldchange jobs if it meant less overtime, only I I % ofmanagers and 1 % of the controllers would, andthis reason is not a consideration for any of theCFOs.

More Responsibility for Women

Do these women believe the general businessenvironment has changed since they started work-ing, and have women been able to influence anychanges in the corporate world?

All groups agree that increased responsibilityfor women and more opportunities for women toadvance in their careers are the most noticeablechanges. The third most obvious change witnessedby CFOs is an increase in salary for women. Own-ers, controllers, and managers disagree. For themthe change in stereotypical perceptions of womenin business was more noticeable. They see no ma-jor trend of women advancing in to seniormanagement.

When it comes to influencing the corporateworking environment, all groups concur that to-day's working women are succeeding in eliminat-ing the perceptions of women in traditional roles.An increased number of available child care ser-vices and more flexible work schedules to accom-modate working mothers also are indications ofhow women are influencing the workplace.

Women management accountants indeed aremaking strides in their careers, and many feelthere's nowhere to go but up. The controller of amedium -size manufacturing company summed upthe climate: "Women in management are modernbusiness pioneers. There are no rules and no rolemodels. The situation is just as we ourselves createit." ❑

Suzanne Connors, marketing services.

How We Conducted the Survey

A random sample of 500 management ac-countants was selected from the NAA's ros-ter of women members who hold accountingand finance positions at the managerial andabove level. Twenty -five hundred NAAwomen members fall into this category. Intotal, 232 usable questionnaires were re-turned, which represents 46% of the samplesurveyed.

This survey is NAA's first effort in track-ing its growing number of women members.For this reason, there are no historical dataon women in management accounting to useas a basis for comparison. We plan to surveyour members periodically in order to docu-ment their career mobility and measures ofsatisfaction with their profession.

For complete survey results, with statisti-cal breakdowns, send a self - addressed mail-ing label to Women's Survey, ManagementAccounting, 10 Paragon Drive, Montvale,N.J. 07645. ❑


Topical Index to Articles inMANAGEMENT ACCOUNTING, Volume LXVII,

and NAA Research Publications

Accounting- InternationalAre U.S. Exporters Benefiting from theFSC?

W. Timothy O'Keefe, Larry H.Beard, and Dana S. O'Keefe, May1986.

Catching China Fever: A ManagementAccountant's Perspective.

Ray Vander Weele, October 1985.How to Choose Transfer P rices forFSCs.

Abdel M. Agami, May 1986.International Transfer Pricing,

Michael P. Casey, October 1985.Managing Multinational ExchangeRisks.

James G. S. Yang, February 1986.Measuring the Mul t i nat io nal 'sPerformance.

Wagdy M. Abdallah and Donald E.Keller, October 1985,

Accounting Standards (See FASB)

Accounts ReceivableToward Better Collections.

Edward H. Kelley, September 1985.

AuditingThe Corporate Audit Committee.

Martha E. Jenkins and Loudell EllisRobinson, December 1985.

Automobile ExpenseCoping with the New Auto Record -keeping Rules.

L. Stephen Cash and Thomas L.Dickens, August 1985.

Banks and BankingAnalyzing the Profitability of BranchBanks.

Collier Mickle, Jim Reed, and DanielButler, December 1985.

Pricing Bank Services.Randall G. Sias, July 1985.

Benefit Costs and Plans

July 1985 -June 1986

FAS 81: Disclosing PostretirementBenefits.

Linda L. Jardine and Randall W.Luecke, October 1985.

CareersSurviving Your First Job.

P.P. Douglas, T. Beed, S. Weisen-burger, and K. Clark, June 1986.

Women Accountants -Do They EarnAs Much As Men?

Josephine E. Olsen and Irene HansonFrieze, June 1986.

Women Management Accountants :Moving Up... Slowly

Susan Jayson and Kathy Williams,June 1986.

Certified Management Accountants(See ICMA)

CommunicationDid You Say What You Said Or DidYou Say What I Think You Said.

Tom D. Lewis, August 1985.

ComputersAre You Wast ing Time wi th YourMicro?

Jeffrey Hazard, May 1986.

ControllersHow Changing Role of the Board Af-fects Controllers.

Robert K. Mueller, December 1985.Improving Productivity in the Control-ler's Organization.

Gene L. Smith, January 1986.Is Your Controllership Function Out ofControl?

Patricia A. Frishkoff, March 1986.The Many Roles of the PlantController.

John F. Kokula, May 1986.

CorporationsThe Magic of 3M: Management Ac-counting Excellence

Kathy Williams, February 1986.Vulcan Materials Automates DeliveryTicket Writing.

James L. Bush, Jr., and Reuben F.Stewart, August 1985.

Cost AccountingBenefit Cost Analysis as a PerformanceIndicator.

G. Stevenson Smith, June 1986.Case -Mix Accounting Can Help Hospi-tals Control Costs.

Joanne A. Collins, November 1985,Cost Defenses for Antitrust Cases.

Arnold I. Barkman and John DavidJolley, II, April 1986.

How Advanced Manufacturing Tech-nology is Reshaping Cost Management.

James A. Brimson, March 1986.How We Match Costs and Revenue in aService Business.

Daniel Wentz, October 1985.Joint Product Costing in the Semicon-ductor Industry.

W. L. Cats - Baril, J.F. Gatti, and D.J.Grinnell, February 1986.

Just -in -Time: An Inventory SystemWhose Time Has Come.

Arjan T. Sadhwani, M.H. Sarhan,and Dayal Kiringoda, December 1985.

Measuring Costs with Machine Hours.Gregory Hakala, October 1985.

The Impact of Automation on Account-ing for Indirect Cost.

Henry R. Schwarzbach, December1985.

Costs, DistributionEnhancing Revenues via DistributionCost Control.

Richard Vangermeersch and WilliamT. Brosnan, August 1985.

Costs, IndirectControlling Indirect Costs with Head-count Forecast Algorithms.

Michael Gilchrist, Diane Pattison,and Ronald Kudla, August 1985.


The Impact of Automation on Account-ing for Indirect Costs.

Henry R. Schwarzbach, December1985.

Credit & CollectionsToward Better Collections.

Edward H. Kelley, September 1985

Data ProcessingBeware the Logo: Buy the RightSoftware.

Alfred M. King, March 1986.Expanding Your Hardware Horizons.

Alfred M. King, February 1986.Expert Sys tems for ManagementAccountants.

Michael D. Akers and Grover L.Porter, March 1986.

FASB Hearings on SoftwareAccounting.

Robert W. McGee, July 1985.How Secure Are Microcomputers?

Patrick L. Romano, March 1986.Management Accounting's PC PackageReview.

Various Business and Academic Con-tributors, January 1986.

Using the Relational Database.James F. Smith and Amer Mufti, Oc-tober 1985.

Vulcan Materials Automates DeliveryTicket Writing.

James L. Bush, Jr., and Reuben F.Stewart, August 1985.

EducationAAA - Management Accounting Sec-tion: Chairperson's Report.

James M. Fremgen and Milton F.Usry, August 1985.

An Academic Dilemma: Teaching ver-sus Research.

William D. Cooper, October 1985.Charles T. Horngren, Management Ac-counting's Renaissance Man.

Kathy Williams, January 1986.Educat ing the ManagementAccountant.

Herbert C. Knortz, January 1986.Eliminate the Ph.D. Requirement forAccounting Educators.

Robert W. McGee, April 1986.Hi re the Management AccountingProfessor.

Carole Cheatham, May 1986.Improving the Management Accoun-tant's Education.

Gerald H. Lander and Alan Rein-

stein, March 1986.Management Accounting Symposia Offto a Good Start.

S.M. Hunt, July 1985.More NAA Student Chapters Needed.

Norman O. Schultz and William C.Kilpatrick, June 1986.

Professional Schools of Accounting:Has the Time Come?

Robert Bloom, Araya Debressay, andWilliam Markel], September 1985.

Robert Anthony: Creating an Account-ing Framework.

Kathy Williams, May 1986.Test Your Acronym Skills.

Orville R. Keister, August 1985.

EthicsEnforcing the NAA Standards of Ethi-cal Conduct.

Julie Y. Gilbert and David E. Keys,January 1986.

Ethical Di lemmas in ManagementAccounting.

Terry K. Sheldahl, January 1986.Standards of Ethical Conduct for Man-agement Accountants.

National Association of Accountants,January 1986.

ExecutivesComptroller's Comptroller: Herbert C.Knortz.

Robert F. Randall, July 1985.Robert Frazer: Powerhouse CEO.

Kathy Williams, August 1985.

Expert SystemsExpert Sys tems for ManagementAccountants.


Financial Accounting Standards Board(FASB)Robert N. Anthony: Creating an Ac-counting Framework.

Kathy Williams, May 1986.FAS 81: Disclosing PostretirementBenefits.


FAS 87 -What it Means for Business.E. Chadwick Ross, March 1986.

FASB on Pension Plans.Louis Bisgay, March 1986.

FASB Pension Statement: More CostDisclosure.

Stephen Landekich, February 1986.

NAA's Response to FAF on Standard -Setting Process.

Staff, January 1986.The Bottom Line, Part 1.

Robert A. Morgan, July 1985.The Bottom Line, Part 2.

Robert A. Morgan, December 1985.The Bottom Line, Part 3.

Robert A. Morgan, August 1985.The Bottom Line, Part 4.

Robert A. Morgan, September 1985.The Impact of Management Account-ing on GAAP.

Donald J. Kirk, July 1985.

Financial ReportingCapital Project Management System.

David Kottlowski, March 1986.Dow Opts for Less -and Gains.

Dennis Dankoski, June 1986.FAS 87 -What it Means for Business.

E. Chadwick Ross, March 1986.FASB Hearings on SoftwareAccounting.

Robert W. McGee, July 1985.How a Proposed Accounting ChangeThreatened an Industry.

Steven L. Slepian, November 1985.How Cash Flow Reporting Should BeChanged.

Al L. Hartgraves and Wi lli am C.Tuthill, April 1986.

Surprise Losses in Quarterly EarningsReports.

Jonathan Schiff, July 1985.The Bottom Line, Part 1.

Robert A. Morgan, July 1985.The Bottom Line, Part 2.

Robert A. Morgan, August 1985.The Bottom Line, Part 3.

Robert A. Morgan, September 1985.The Bottom Line, Part 4.

Robert A. Morgan, December 1985.

Financial AnalysisDefeasance: Financial Tool or WindowDressing?

Paul K. Chaney, November 1985.

ForecastingControlling Indirect Costs with Head-count Forecast Algorithms.


GAAPHow a Proposed Accounting ChangeThreatened an Industry.

Steven L. Slepian, November 1985.


The Impact of Management Account- Measuring Costs with Machine Hours. Suzanne Pierce Krissler, April 1986.ing on GAAP. Gregory Hakala, October 1985. Teleconferencing - Meeting on the Air.

Donald J. Kirk, July 1985. Suzanne Pierce Krissler, April 1986.

GovernmentNAA in Washington.

Robert F. Randall, May 1986.Restoring Public Confidence in Govern-ment Contractors.

Fred J. Newton, June 1986.

Institute of Certified ManagementAccountantsCMA: Progress and Prospects.

Susan Jayson and Kathy Williams,November 1985,

CMAs Can Learn From the U.K.Experience.

Richard Kochanek, Bimal Prodhan,and Harold Wyman, November 1985.

Does College Prepare You for the CMAExam?

Robert J. DePasquale, November1985.

How CFOs View the CMA Program.Robert Farrar, William Lawler, andLinda Block, November 1985.

How Valuable Is the CMA?Dale L. Flesher and Frances M.McNair, November 1985.

InventoriesAnalyzing Inventory Systems.

Dale G. Sauers, May 1986.Just -in -Time: an Inventory SystemWhose Time Has Come.

Argan T. Sadhwani, M.H. Sarhan,and Dayal Kiringoda, December 1985.

Operating Rhythm.James Wagner, June 1986,

Where Did the Inventory Go?Don M. Swann, May 1986.

InvestmentsWhat You Should Know About Repos.

Daniel L. Kovlak, May 1986.

Labor, CostsControlling Indirect Costs with Head-count Forecast.


Measuring Costs with Machine Hours.Gregory Hakala, October 1985.

Leveraged Buyouts (LBO)See Mergers and Acquisitions

Machine Costs

ManagementMotivat ing Managers with PositiveReinforcement,

Barbara Mackey Carlson and JoanneA. Collins, March 1986.

The Many Roles of the PlantController.

John F. Kokula, May 1986.What Kind of Leader Are You?

Dr. Sharon Crain, September 1985.

Management AccountingAt the Crossroads.

James B. Edwards, September 1985.Charles T. Horngren: Management Ac-counting's Renaissance Man,

Kathy Williams, January 1986.Ethical Di lemmas in ManagementAccounting.

Terry K. Sheldahl, January 1986.Expert Sys tems for ManagementAccountants.


Robert N. Anthony: Creating an Ac-counting Framework.

Kathy Williams, May 1986.The Impact of Management Account-ing on GAAP.

Donald J. Kirk, July 1985.The Magic of 3M: Management Ac-counting Excellence.

Kathy Williams, February 1985.

Management Accounting PracticesCommittee (MAP)International Harmonization of MAPGuidelines,

Stephen Landekich, November 1985.SMA4B: Allocation of Service and Ad-ministrative Costs.

December 1985.SMA40 Definition and Measurementof Direct Labor Cost.

December 1985,SMA413- Measuring Entity Perfor-

mance.March 1986.

Statement of Purpose and Operation.June 1986.

Management Information SystemsCapital Project Management System.

David Kottlowski, March 1986.Managing Information with ElectronicMail.

Mergers and AcquisitionsAccounting for that Other Prior PeriodAdjustment.

M.H. Raiborn, M.R. Lane, and D.D.Raiborn, July 1985.

Why LBOs are Popular.Susan Harding, L. Hanouille, J. Rue,and A.G. Volkan, December 1985.

MotivationMotivating Managers with PositiveReinforcement.

Barbara Mackey Carlson and JoanneA. Collins, March 1986.

National Association of AccountantsComptroller's Comptroller: Herbert C.Knortz.

Robert F. Randall, July 1985.Enforcing the NAA Standards of Ethi-cal Conduct.

Julie Y. Gilbert and David E. Keys,January 1986.

Jack Vavasour- Mister NAA (1920-85).

Robert F. Randall, November 1985.NAA on Sales Forecasting System.

Pat Romano, December 1985.NAA Uses Video to Keep MembersCurrent.

Dan Hrisak, December 1985.NAA's Response to FAF on Standard -Setting Process.

NAA's Ad Hoc Committee, January1986.Nominating Committee Report,

Staff, May 1986.Partnership for Profit - Nashville '86.

Staff, April 1986.Reporting for Profit in Nashville '86.

Staff, March 1986.St. Louis '85: Leadership in the '80s.

Robert F. Randall, September 1985,

Nonprofit OrganizationsA Tale of Woe (or 10 mistakes of a vol-unteer accountant).

Joann N. Cross, April 1986.

Pension PlansCapitalizing on Excess Pension Assets.

E. Richard Brownless, II, January1986.

FAS 81: Disclosing PostretirementBenefits.

MANAGEMENT ACCOUNTING /JUNE 1986 B7


FAS 87 -What it Means for Business.E. Chadwick Ross, March 1986.

FASB on Pension Plans.Louis Bisgay, March 1986.

FASB Pension Statement: More CostDisclosure.

Stephen Landekich, February 1986.Firms Terminate Record Number ofPension Fund Plans.

Robert F. Randall, February 1986.Pension Account ing: the LiabilityControversy.

Sharon S. Waggoner, July 1985.

PersonnelCan You Still Say, `You're Fired!'?

Richard M. Roderick, April 1986.Save Time, Money, and Taxes -LeaseYour Employees.

Nancy F. Hanshaw, Thomas A. Ul-rich, and Charles J. Hollon, April

1986.

Planning ControlHow U.S. Firms Conduct St rategicPlanning.

James F. Brown, Jr., February 1986.

Plant ManagementOperating Rhythm.

James Wagner, June 1986.

PricingParagon Pricing.

John A. Pearson, June 1986.

Prior Period AdjustmentsAccounting for that Other Prior PeriodAdjustment.

M.H. Raiborn, M.R. Lane, and D.D.Raiborn, July 1985.

R&D Limited PartnershipsRDLP: Tax Shelter Provides Benefitsfor Everyone.

H. Grindle, C.W. Caldwell, and C.D.Strobel, July 1985.

Revenue RecognitionHow We Match Costs and Revenue in aService Business.

Daniel J. Wentz, October 1985.

Risk ManagementManaging Multinational ExchangeRisks.

James G.S. Yang, February 1986.

Service IndustriesHow We Match Costs and Revenue in aService Business.

Daniel J. Wentz, October 1985.

Software AccountingFASB Hearings on SoftwareAccounting.

Robert W. McGee, July 1985.

TaxationAre U.S. Exporters Benefiting from theFSC?

W. Timothy O'Keefe, Larry H.Beard, and Dana S. O'Keefe, May

1986.Coping with the New Auto Record -keeping Rules.

L. Stephen Cash and Thomas L.Dickens, August 1985.

Deferred Taxes and Consolidations -ACase for Change.

Leon B. Hoshower and William L.Ferrara, December 1985.

How to Choose Transfer Prices forFSCs.

Abdel M. Agami, May 1986.IRA Distributions.

Susan Jayson, March 1986.New Automobile Substantiation Rules.

Israel Blumenfrucht, February 1986.New Rules for Computers.

Michael J. Whiteman and AnthonyT. Krzystofik, September, 1985.

Planning for Lump -sum Distributions.Susan Jayson, January 1986.

RDLP: a Tax Shel ter that ProvidesBenefits for Everyone.

H. Grindle, C.W. Caldwell, and C.D.Strobal, July 1985.

Regulat ions Gover ni ng FSCsExplained.

Susan Jayson, November 1985.The Impact of ACRS Lives on DeferredTax Accounting.

David M. Dennis, Jack L. Smith, andWilliam J. Ferlita, March 1986.

Understanding the Unitary Tax.Henry R. Anderson and D. DaleBandy, September 1985.

When a Holding Company is Mergedinto an Operating Sub.

Susan Jayson, March 1986.When Personal Injury Damage AwardsAre Taxable.

Israel Blumenfrucht and Jerold M.Weiss, December 1985.

Tax SheltersRDLP: a Tax Shelt er that P rovides

Benefits for Everyone.H. Grindle, C.W. Caldwell, and C.D.Strobal, July 1985.

Transfer PricingInternational Transfer Pricing.

Michael P. Casey, October 1985.

Women in AccountingWomen Management Accountants:Moving Up... Slowly

Susan Jayson and Kathy Williams,June 1986.

Surviving Your First Job.P.P. Douglas, T. Beed, S. Weisen-burger, and K. Clark, June 1986.

Women Accountant s -Do They Earnas Much as Men?

Josephine E. Olsen and Irene HansonFrieze, June 1986.

NAA Research Publications

Sales Forecasting Systems.Eugene A. Imhoff, Jr., January 1986.

Presenting Accounting Information toManagement.

Patricia P. Douglas and Teresa K.Beed, March 1986.

The Use of Performance Measures.James B. Edwards, March 1986.

The Use of Variable Costing in PricingDecisions.

Thomas M. Brueggelmann, Gaile A.Haessly, Michael Schiff, Claire P.Wolfangel, May 1986.

Decision Support Systems.Susan Davis - Stemp, Joshua E. Min -kin, John Thomopoulos, Morris W.Stemp, Robert Howell, May 1986.

The Use of Mathematical Models.W. Thomas Lin and Paul R. Wat-kins, June 1986.

Account ing for Cos ts as F ixed andVariable.

Maryanne M. Mowen, June 1986.

Statements on Management Accounting

SMA4B: Allocation of Service and Ad-ministrative Costs.

December 1985.SMA4C: Definition and Measurementof Direct Labor Costs.

December 1985.SMA41): Measuring Entity Perfor-mance. March 1986.Statement of Purpose and Operation.

May 1986.


Accounting Education

5 0 0knowledge in order to gain from theprofessional development experience,but is it necessary to be an honor stu-dent to benefit from these programs?We think not!

The solution to this moral dilemma isto encourage faculty and administratorsto provide an alternative organization,of professional stature, that can satisfythe nonacademic development needs ofall accounting students. The problem ofproviding an alternative organization tosupplement the dual honorary and pro-fessionally oriented programs many uni-versities now offer, is one that deservesthe increased attention of the NAACommittee on Academic Relations aswell as the leadership of the local chap-ters. Although it is important to intro-duce students to the NAA chapter ac-tivities, to reward academic excellence,and to sponsor student nights, we mustdo more to provide professional experi-ences to all students. And that meanssponsoring and supporting NAA stu-dent chapters wherever a student needfor a professional development experi-ence exists. ❑

Norman O. Schultz holds a doctoratefrom the University ofUtah and is pres-ently an assistant professorofaccountingand taxation at Colorado State Universi-ty. He is the current president ofthe Col-orado Wyoming Chapter of the NAA,through which this column wassubmitted.

William C. Kilpatrick, Ph. D., CMA,CPA, is currently a professor of account-ing and taxation at Colorado State Uni-versity. Dr. Kilpatrick is a past presidentof the Colorado Wyoming Chapter oftheNAA.

Research

1 4 "written materials provided (48 %),chargeable telephone support (47 %),seminar training sessions (28 %), andpersonal visits by publisher support/sales personnel (16 %).

How do partners keep up -to -datewith accounting software? Seventy -three percent read published magazine/newsletter articles, 64.5% read pub-lished reviews, 56% depend on hands -on experience, 55% depend on productliterature, 49.5% rely on industry word -of- mouth, and 43.5% cite contact withcomputer dealers. One third of the re-spondents regularly read PC World,24% read PC Magazine, 21% readComputers and Accounting, and 20%read PC Week.

Business relationships with localcomputer dealers had been developedby the accounting firm contacting andsoliciting the dealers according to 55%of the respondents. Eighteen percent re-sponded favorably to being contactedand solicited by the dealers. Sixty -sevenpercent work with two or three comput-er dealers on a referral basis, 17% withonly one dealer, 7.5% with four to fivedealers, and 8.5% with more than five.

Advising clients on software is not aneasy task. ❑Kim Serocke

Ed. Note. The fact that independent ac-countants are reselling software, devel-oped by others, to their clients has signifi-cant implications. We plan to explorethis issue in the future.

Opinion

6 "and who are willing to work hard toachieve it. Wouldn 't i t be nice i f agroup, or even one or two members,from each of our 300 -plus chapterscould take a new business under itswing, to advise and counsel and help itsucceed? Perhaps our Committee onCommunity Responsibility can considerthe idea.

P.S. Perhaps this column is particularlyappropriate for this issue which features"Women in Accounting ": both of theentrepreneurs in question are youngwomen. Yes, that business has passedits first breakeven point even though thedraw by the entrepreneurs hardly com-pensates for their 80 -hour weeks. On-ward and upward! ❑

ACCOUNTANTPROFESSIONALammASSOCIATION Emm

Unique career opportunitynow exists on the professionalstaff of this leading account -ing association Position en-tails aiding in the preparationof CMA examination and thedevelopment of the CMA pro-gram Qur successful candi-date will possess 3 -5 yearscollege teaching experience.managment accounting andcomputer background Gradu-ate degree and CMA or CPArequired. Position availableimmediately in Montvale, N.J.Please send detailed resume.INCLUDING salary history lo:

DR. KARL REICHARDT

I C M A M R T I A 'NAGEMONT

• • • • • • • • • ACCOUNTANTS10 Paragon Drive, P.O. Box 40S

Montvale, N.J. 07645

TAXPLIFICATIAHEAD!

Tux "simplification" is coming And"simple" is one thing ifs not going to be.

Purchase BNAs software for the IBM -PCnow— Income Tax, Real Fstate Investment,Estate Tax or Corporate lhx Vreadsheets.After the new law paw, we'll sendyouan updated disk revised to handle the

hundreds of complex calculations expectedin the Tax Reform Act of 1986.

For more information tall 1- 800 -372-1033 (in MD 1- 800-352 - 1400, in Wash.,D.0 258 -941) or write to the address below

But do it now. Before thousands ofpages of tax simplification take you bysumma.

BNASOFfWAREA d6tim of The Bumau of Nahomd Affain, Inc.

P0. flux 4A30, Wakington. RC AV164ill

C ir c le nu mb er 7 on reply c a rd .


People in the NewsPromotions and New Positions

Shirley F. Pierce, Alaskan, is now Alas-ka controller for Alpac.

Duane R. Wolter, Atlanta North, hasjoined McCrory Stores, Inc., York, Pa.,as vice president and chief financialofficer.

Charles E. Downs, Beaver Valley, isnow cont ro l ler at Sharon Tube inGreenville, Pa.

Robert L. Guyett, Dallas, is now vicepresident and treasurer of The LTVCorp.

GUYETTDallas

Rudolph C. Muravez, Eugene- Spring-field, is now director — management in-formation systems for the City of Ox-nard, Calif.

Alan C. Wilson, Greater YoungstownArea, is now comptroller for Ohio FastFreight, Case Heavy Hauling and relat-ed companies in Warren, Ohio.

Robert C. Ristagno, Member -at- Large,USA, has joined American Works aschief financial off icer. ... Milton F.Usry has been appointed Mary BallWashington Professor of Accountancyat the Univers i ty of Wes t Florida,Pensacola.

Robert Sawyer, Milwaukee, recentlywas promoted to corporate controller ofUniversal Electronics C o . . . . RobertKappel was promoted to vice presidentfinance /treasurer of Wisconsin Steel &Tube Corp.

Gary R. Archambault, MinneapolisNorthstar, has opened up the Archam-

Stan F. Stec (I), manager of the Association's Self -Study Program, acceptsa Certificate of "Excellence in Association Publications" for NAA's Self -Study catalog. Presenting the certificate at the annual awards luncheon heldin Bethesda, Md., is Col. Frank Martineau, chairman of the Martineau Pub-lishing Co. and its weekly newspaper, Association Trends.

bault Group, which specializes in ac-counting and finance employmentplacements.

Michael C. Crowley, Pittsburgh, wasappointed manager, managerial ac-counting, corporate controller's depart-ment at PPG Industries.

Maureen T. Baxter, Sioux City, hasbeen named vice president — financialdevelopment at Briar Cliff College.

Emeritus Life Associates (ELAs)

Walter G. Barchet, SusquehannaValley.Thomas R. Berry, Dubuque Tri- State,past president.W. Robert Bissell, Fort Lauderdale.James B. Black, Georgetown — MyrtleBeach.Howard S. Brown, Kalamazoo, pastpresident.C. E. Bynane, Roanoke.Robert S. Byrne, Morristown - Essex.

Carl A. Carlson, Pinellas Suncoast.Robert A. Cassans, New York.M. Doyle Childress, Los Angeles.Frank J. Ciaravella, Baltimore,Shirley J. Clark, Shreveport, pastpresident.Frank P. Colonnese, Jr., MohawkValley.Lynwood A. Cookson, Bangor- Water-ville, past president.Wi l l i am E. Dahl , Phoenix, pastpresident.Lawrence A. Diebner, New York.Robert F. Dubraska, Waterbury, pastpresident. Stuart Cameron McLeod So-ciety (SCMS).Edward T. Durkin, Harrisburg Area,past president.Henry A. Erk, Jr., St. Louis, pastpresident.Frank P. Ferguson, Jr., Fort Worth.Herbert C. Fisher, Western Montana.Herman Goodwin, Jr., Mid- Florida.William C. Hortman, Delaware.David H. Hough, South Jersey, pastpresident.


Joseph D . Iaconis, Columbus.A. Clyn Inman , Albuquerque.Carl L . J an neck, J r, , New Orleans.R o ge rs M . J o h n s o n , No rt hwes t ernMichigan, past president.W a y n e R . J o h n s o n , I ll o w a , p as tpresident.John J . Knobloch, Beaver Valley, pastpresident. SCMS.J. H . Ku hr , Jr . , Westchester.Jo hn R . Iam b , Albany, past president.Morris Levine, New York.Fred E. Lord, Bridgeport, past nationaldirector, 1979 -81. SCMS.Ro bert E . Marion , Jr ., Lancaster.J ack E. Meadows , Chattanooga, pastpresident.Cather ine M. Nepkie, Los Angeles.Earl R amsey , Indianapolis.Harold H . Ros s, Chicago.Walter W . Ruegger, New York.A. Eu gen e Sch ro ed e r , I llo wa , pastpresident.Richard J . Schweppe, St. Louis.Robert W . Shopoff, Dallas.Dan D. Siegrist , Tippecanoe, past presi-dent. SCMS.Cleo C. Smith , Phoenix.Ro na ld M . Valentine, Merrimack Val-ley, past president.Rob ert W . Vernon , Orange Coast Cali-fornia, past national director, 1975 -77.SCMS.Calvin A . Wantland , Indianapolis.

Harry W. W elle r, Elmi ra Area.

In Memoriam

Ronald W. Barnett, 35, Central Arkan-sas, 1973.Daniel F. Cleary, 59, Binghamton,1958. Emeritus Life Associate (ELA).Joseph Dailey , 72, Pittsburgh, 1957.ELA.Arthur J . Dellinger, Sr., 68, W, Los An-geles, 1970.Frank R . Giarina, 65, Nashville- CapitolCity, 1966.Karl B. Gilbert , 72, Lehigh Valley,1946. ELA.Amos F. Martin, 62, Lancaster, 1949.ELA.Stanley G. Marx, 49, Hawaii, 1968.A. Frisbee Mitchell, 75, Norwich, 1952.ELA.John G. Myers, 67, Washington, 1963,ELA.

If you would like to pay tribute toa deceased member of the Associa-tion, a fitting way might be to senda tax - deductible contribution tothe NAA Memorial EducationFund, 10 Paragon Drive, Mont-vale, N.J. 07645 -0433,

Ilk 1

"Joanie, you've been elected senior vice president; Hazel and Vickie are newvice presidents; Donna was named treasurer, and Tom, senior office boy. "

When It's Important ...Measure Up

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THE ' 1986PUBLICATIO S CATALOG

IS NOW AVAILABLE...exclusively from NAA.

Our new catalog will give you access toover 100 publications, written especiallyfor management accountants. Newstudies have been completed on suchtimely issues as software taxation, in-creasing productivity, and managingmicrocomputers. The latest CMA examquestion and answer booklets are in-cluded, too.

If you haven't received your newcatalog yet, just mail this coupon or awritten request to: NAA, Special OrderDept., 10 Paragon Drive, P.O. Box 433,Montvale, NJ 07645.

Please send the new 1986 publications catalog to: I

name (please print or type)

company (if part of mailing address)

address

city state zip country

NAA member Nonmember: please send me membershipinformation

MA 6/86

New Products /Services

The IBM PC Convertible.

IBM has released two new series of ac-counting programs for its PCs. TheIBM Business Adviser is said to provideflexible high- function accounting pro-grams for businesses using one or morePCs. The IBM Accounting AssistantSeries is designed to meet the bookkeep-ing needs of small to medium -sizedbusinesses. IBM also announced the re-lease of its smallest full - function person-al computer —the IBM PC Convert-ible —which features a detachabledisplay that can be removed easily toconvert the system into a desktop com-puter with optional color and mono-chrome displays. For further informa-tion, call Joy Milne at the corporateInformat ion Systems Group, RyeBrook, N.Y., at (914) 934 -4836.

X -Y -SEE Software has int roducedPROFIT -MAPS, a graphic approach toprofit planning on the IBM PC, de-signed so CPAs and controllers can de-liver profit planning to managers whoare not financial number -table experts.PROFIT -MAPS can summarize andcompare 1,000 profit what -ifs on a sin-gle clear graph. Its built -in expertise forcreating and using these graphs makes iteasy for managers to get full profit plan-ning value from the graphs and also en-ables CPAs to use live graphic profitplanning in meetings wi th clients.PROFIT -MAPS works on an IBM PCwith color /graphics board, or a compat-ible such as Compaq, with 320 K RAM

and DOS 2. Contact Dick Purcell, Ev-ergreen, Colo., at (303) 674 -4506.

N. Gutman Associates has introduced anew portfolio tracking system namedInvestrec. The program is designed torun off the Lotus 1 -2 -3 spreadsheet, iscompletely automatic through the useof Lotus macros, and displays its owncustomized menu in a fashion identicalto Lotus. Investrec can track up to sev-en groups or portfolios of stocks, mutu-al funds or similar securities on one dis-kette. Each group can contain up to 20different issues. The program is notcopy protected so that by copying it toother disks additional portfolios can bemanaged. Investrec comes on one 5 1/4-inch diskette together with an easy -to-read 13 -page manual. For further infor-mat ion , contact the comp any inSimsbury, Conn., at (203) 658 -7789.

RES (Recruitment Enhancement Ser-vices, Inc.), a company of BernardHodes Advertising, has introduced a"dial -a job- interview" telephone servicefor companies seeking employees as wellas people looking for a job. Clients runhelp- wanted ads with the response di-rected to a RES "800" number at anytime, 24 hours a day, seven days a week.For job seekers who qualify, RES pre-pares job candidate profiles and passesthem on to the client. The job seeker

never writes a resume and client compa-nies have profiles of only well - qualifiedpeople. Clients own the profiles so canhire other employees without extra re-cruitment costs. RES serves more than100 leading firms throughout the coun-try and generates and screens candi-dates from executives to technicians.For further information or a free bro-chure, call Barry Siegel, Houston, Tex.,at (713) 690 -1385.

LaserSoft, Inc., has released a new con-trol unit, LaserForms I, which makes itpossible to use standard office copierpaper in computerized form- filling sys-tems instead of pre - printed forms. La-serForms I operates between the com-puter and a laser printer. The image ofthe form is stored on a floppy contained

Elizabeth Warren, Editor

in the unit. As data is received from thecomputer, the system simultaneouslyprints the form and fills it in. The sys-tem works at the speed of a laser printerand exactly reproduces the existingform, including line or halftone art andlogotypes. All copies are originals of la-ser printed quality. Laserforms I is com-patible with any computer from microto mainframe, and operates with anyfull -page laser printer. Present softwarecan be used without changes or modifi-cations. For information, write Laser -Soft, Inc., P.O. Box 137, Allenhurst,N.J. 07711, or call Frank McAllan, at(201) 775 -7777.

NCA Corporation has developed a newMAXCIM Order Mauagement Modulefor its MRP II System which providescomplete control over order processingfrom sales through accounts receivable.The Order Management Module, re-placing the current Order Entry Mod-ule, enables manufacturers to processorders in their entirety or by line items.Pricing and discounting information aredisplayed when sales orders are entered.Customers' history, backlogged ordersand available credit are checked auto-matically. The Order ManagementModule then determines i f parts areavailable to fulfill all or part of the or-der. After an order is shipped, the mod-ule captures the shipping detail, de-pletes on -hand inventory quantities, andproduces an invoice. For information,call Michael A. Reiff, Santa Clara,Calif., at (408) 986 -1800.

Advertisers' Index

Accountemps .BN A S o f t wa re . . . . . . . . . . . . . . . . . . . . . 6 9C a no n, U S A . . . . . . . . . . . . . . . . . . . . . . . 1 3C i t i c o r p . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6Computer Associates

. . . . . . . . . . . . . . C -2C o n s c o . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1Data Design

........................7IC IA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 9Mi c r o ma s h . . . . . . . . . . . . . . . . . . . . . . . . 7 1M S A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5N A A C l a s s i f i e d . . . . . . . . . . . . . . . . . . . . . 5NAA Publications Catalog

...........71National Underwriter Co. . . . . . . . . . . . 1 9O p e n S y s t e ms . . . . . . . . . . . . . . . . . . . . . . 2 6Ra d i o S ha c k . . . . . . . . . . . . . . . . . . . . . . . . 9Robert Half

. . . . . . . . . . . . . . . . . . . . . C -4Security Pacific

. . . . . . . . . . . . . . . . . .C -3

Society of Real Estate Appraisers. . . . . 15


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On hiring: "No one can be right all of the time, but it helps to be right most of the time.'Robert Half on HiringbyRobert Half (Crown)

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• You'll be getting highly personalized service fromprofessionals who understand your financial andedp needs.

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• You'll have the advantage of the resources of the largestorganization in the financial and data processingpersonnel field, with offices on three continents.

• You pay nothing unless we fill the job. And, we backeach and every placement with a liberal guarantee.

Next time you're looking for an accountant, financialor edp professional, call your nearest Robert Half office.You'll be glad you did.

R O B E R TB A L F

M

© accounting, financial and edppersonnel specialists.

O 1985 Robert Hal! InternationalInc. All offices independently owned and operated.


Documents

1986-06-Management-Accounting-v67-n12.pdf - Strategic