This article presents information on the use of dynamic programming in analyzing two accounting methods for inventories and their potential effect on manager decisions. The objectives are to consider the viability of dynamic programming in considering alternative accounting methods and their potential decision effects and the potential decision effects of variable and absorption cost inventory methods. These objectives are met by developing quantitative statements of the alternative methods in a decision-making context, transforming these statements to a dynamic programming formulation, solving these mathematical programs via the computer and analyzing the results in view of past research in the area. Inventory valuation methodology alternatives were selected because of the longtime interest of accountants in utilizing and comparing these systems, the resulting literature made available by that interest, and most important the failure of that literature to disclose a general model capable of fully investigating the decision alternatives in either an analytic or empirical manner. The dynamic programming solution technique is employed as the only viable optimizing methodology in existence.

Reviews the book "Cost Accounting: Principles and Practice," Eighth Edition, by John J.W. Neuner.

Reviews the book "Fifty Years of Statistical Auditing," edited by William R. Kinney Jr.

Discounted Cashflow, Planning Horizon, Forecast horizon

Auditing, Sampling, Substantive test, Compliance

This article presents a comment on the study of the audit staff assignment problem in the U.S. The use of quantitative models in the solution of accounting problems has been criticized for their simplistic objective functions, e.g. maximize profit, minimize cost. Goal programming provides an obvious improvement for those problems previously solved via other linear optimizing models. One would expect it to replace linear programming formulations in a short time as it will accommodate each of the prior formulations with the added potential of multiple ranked goals.

Reviews the book 'Comparative International Auditing Standards,' edited by Belverd E. Needles Jr.

Reviews the book "A Study of the Application of Statistical Sampling to External Auditing," by T.W. McRae.

The article reviews the book "Computer Control and Audit: A Total Systems Approach," by John G. Burch Jr. and Joseph L. Sardinas Jr.

Common dollar financial statements add a second time dimension to financial reporing that beginning students of accounting mag find difficult to grasp. The authors find that students' difficulty in understanding the roll-forward adjustment and the distinction between monetary and nonmonetary items is alleviated when common dollar statements are introduced with a two-dimensional display. The two-dimensional display accommodates the money time dimension as distinguished from statement time, the monetary/nonmonetary distinction, the computation of income and the reconciliation of equity accounts as between statements based on common dollar magnitudes.