Reviews the book "Accountant's Office Manual," by Charles S. Rockey.

Distinction between auditing standards and auditing procedures is one that has not been at all clear in minds of many who have used the term. Unfortunately, some accountants have not even been aware that there is any distinction. However, this is not too surprising, it was not until February, 1941 that the word auditing standards became a recognized part of the accountant's language. At that time the short form of accountant's report or certificate recommended by the Committee on Auditing Procedure of the American Institute of Accountants was amended to include the sentence "our examination was made in accordance with generally accepted auditing standards applicable in circumstances and included all procedures which we considered necessary." This amendment to the wording of the report was made to meet the U.S. Securities and Exchange Commission's amendment 3 to its Regulation S-X which, among other things, required the auditor to state whether the audit was made in accordance with generally accepted auditing standards applicable in circumstances and whether the audit made omitted any procedure deemed necessary by the accountant under circumstances of the particular case.

The article focuses on the restoration of fixed asset values to the balance sheet in accounting. The subject matter of this debate is given current importance at this time because of the procedures followed by many companies in accounting for the amortization of facilities acquired under certificates of necessity issued pursuant to Section 124 of the Internal Revenue Code. Surprisingly little attention has been given to the treatment of fully depreciated assets in accounting literature. This is probably due to the fact that the difference between the aggregate net book value of depreciable assets actually carried in the accounts and the amount that would have been had there been more accurate estimates of depreciation been followed is not sufficiently great to have a significant effect upon the statements in any but the most exceptional cases. Generally, an excessive rate of depreciation is noticed before the matter has gone so far that it cannot be remedied satisfactorily by reducing the charges during the remaining life.

Accounting as it is commonly understood is the art of recording, classifying, summarizing and interpreting transactions and events which are, in part at least, of a financial character. The roles which the art of accounting plays in taxation are both varied and important. Only the most elementary estimates of revenue needs can be made unless they are supported by comprehensive accounting classifications of expenditures by the taxing unit for a period of prior years together with similar classifications of the estimates of its current needs. In controlling and reporting upon the collection and disposition of public revenues, accounting is, of course, a commonplace. But it is in the field of income taxation, the revenues from which play such a dominant part in the financial programs of the Federal Government and of many of the states, that the role of accounting in the taxing process attains its greatest importance. Without accounting, the administration of an income-tax program would be impossible.

In support of the theory of renegotiation, the author has mentioned a concept which was not developed last year. It has been a great many years since the theory was developed that the government had the right to regulate and fix the prices of services of public utilities, that is,of businesses which are vested with a public interest. Under that theory, innkeepers and common carriers were regulated a century and a half ago. More recently, the railroad, electric, gas, telephone, telegraph, warehouse, bus and other businesses have been regulated. In wartime, there is virtually a state of monopoly because the government needs everybody's services so badly that competition does not exist. It needs the product of every plant and must have it at whatever price. Certainly the government and the well-being of the public are sufficiently dependent upon the results of the production of war material that it cannot be said that such production is not vested with a public interest. The Revenue Act of 1943, after four rather complete and comprehensive Congressional investigations of renegotiation, substantially amended the Renegotiation. Act.

The article presents information on the American Accounting Association's annual meeting to be held from September 8-9, 1944, in Chicago, Illinois and the program to discuss various vital subjects including impacts of war. Tentative plans for a discussion of the termination of war contracts, a subject that is already of vital importance to businessmen and their accountants. As changes in war needs develop, necessitating cutbacks and contract cancellations while one is still actively in the war, increasingly large numbers of businesses will be affected and as one approach and reach the end of the war the problems will be tremendous. Persons who are active in establishing and executing the policies of termination for the government will be on the program, as well as representatives of industries which are materially affected. Of special interest to both teachers and practitioners, is the subject of post-war education in accounting. In that connection it is planned to have discussions of such subjects as refresher courses for returning accountants; the possibility of an accelerated training program along the line developed by the Army and the Navy; possibilities of visual instruction; general requirements essential to a successful professional career.

The article discusses the need for accounting principles. The income statement for any given period should reflect all revenues properly given accounting recognition and all costs written off during the period regardless of whether or not they are the results of operations in that period. The wide distribution, of corporate securities, the inability of the vast majority of investors to judge the value of their investments by any close-range view and their dependence upon information contained in published financial statements, has placed a responsibility upon the accountants to which many of them have not yet become adjusted. According to the author, procedures so generally followed among accountants as to constitute substantial precedent are not always fundamentally sound. The extent to which a particular practice is generally accepted is hard to measure. Those who depend upon precedent are usually content with finding a number of cases to support their position without substantial effort to ascertain the extent to which other practices are followed.

Reviews the book "Preparation and Certification of Financial Statements," by B. Bernard Greidinger.

Reviews the book "The Make-or-Buy Decision," by Anthony J. Gambino.

Reviews the book "Accounting Systems: Procedures and Methods," 3rd ed., by Cecil Gillespie.