Reviewed by Jack L. Krogstad The University of Texas at Austin
Professor Sterling and the Price Waterhouse Foundation are to be commended for re-exposing Dickinson’s historical classic. Ac-counting Practice and Procedure, first published in 1914, contains a comprehensive synthesis of the state of the art in the United States during the early years of the 20th century. The book’s great value stems largely from the professional experience, intellectual stature, and moral commitment of its author. Dickinson’s ambitious objec¬tive is to compress his “twenty-five years of practice on both sides of the Atlantic” into a useful compilation of accounting principles and methods (preface). He attempts to avoid technical discussion of accounting matters yet to supply the essential theoretical reason¬ing which underlies accounting principles and methods. His genuine appreciation and high respect for the accounting profession flavor the book with refreshing moral and ethical dimensions.
The introductory chapter presents a review of bookkeeping funda-mentals to provide the basis for understanding accounting prin¬ciples. Chapter II gives an overview of the balance sheet. Dickin¬son depicts the balance sheet as presenting financial condition in terms of present values. This statement is viewed as the cornerstone of accounting. Correspondingly, the remainder of the book is or-ganized around the balance sheet format presented in Chapter II (pp. 34-35). Chapter Ill, explores the nature and principles guiding preparation and presentation of the profit and loss account. This account is viewed as an important extension of the balance sheet and “true profit or loss for the period” is determined by comparison of values contained in beginning and ending balance sheets (p. 74). The detailed attention accorded profit and loss accounting is note¬worthy. The format of the account presentation (pp. 64-65) is considered the forerunner of the modern income statement (forward to the reissue). The next four chapters (IV-VII) elaborate upon the overview of the balance sheet provided in Chapter II. Chapter VllI presents a brief, perceptive discussion of consolidated statements with emphasis on the balance sheet. Cost accounting is the subject of Chapter IX and also is discussed in Chapter V (pp. 99-108). The final chapter deals with the duties and responsibilities of public accountants in activities connected with (1) prospectus preparation, (2) annual audits, and (3) liquidation and reconstruction.
An appendix of eight sections (43 pp.) contains excerpts from English and Canadian laws related to accounting, forms of balance sheets prescribed by the Interstate Commerce Commission, and forms of statements required from national banks and from insur¬ance companies.
Dickinson’s book is a rich source of accounting history. Its breadth, depth, and style give it unusual appeal for teachers, stu¬dents, and practitioners alike. It provides historical perspective for a number of contemporary issues challenging the accounting pro¬fession today. For example, the book addresses issues such as ade¬quate disclosure, uniformity in financial reporting, interim financial reports, estimates of future earnings, fluctuations in foreign ex¬change, and duties and responsibilities of auditors. The book also reveals the evolutionary nature of many currently accepted ac¬counting principles and practices. For example, depreciation ac¬counting is shown to have evolved from needs for creditor protec¬tion and dividend payout restrictions. Dickinson’s accounting ex¬perience in both England and the United States enables him to span cultural factors and contrast unique environmental considera¬tions germane to the development of accounting in the respective countries. The impact of English practice and English laws on United States accounting is both highlighted and judiciously documented
One section of the book deserves additional comment. Chapter X, “The Duties and Responsibilities of the Public Accountant,” (37 pp.) provides an excellent summary of many key issues previously discussed in some detail. A reader would do well to carefully ex¬amine this chapter before reading the remainder of the book. In fact, reading this chapter alone is an informative, provocative intel¬lectual experience.
The remainder of the book is of more diluted value. Specific in-terests might lead to examination of sections dealing with topics such as cost accounting, depreciation, or consolidated statements. However, other sources provide more exhaustive treatment of the historical aspects of these topics. Furthermore, the discussion of specific issues like valuation, depreciation, and ethics, tends to be scattered throughout the book and is thus not readily available for convenient reference. The inclusion of a detailed subject index (21 pp.), however, facilitates accessibility to such material.
(Vol. 3, No. 1, p. 2, 1976)
