Abstract In both termination and renegotiation the professional accountant may serve very useful purposes. Audit reports of independent certified public accountants, if available, are requested by Price Adjustment Boards in all renegotiation proceedings and many termination proceedings. Such reports lend credence to the financial representations of contractors. Likewise, the professional accountant can render valuable assistance in the orderly and conscientious preparation of data submitted in renegotiation and termination. In all these matters, the professional accountant must maintain his status of unbiased independence, avoiding advocacy, which is fundamentally incompatible with his function as independent certified public accountant. Provision for the renegotiation refund should be included in the balance sheet as a current liability, and in the income statement, preferably, as a specific deduction from sales with the related tax computed accordingly. Obviously, it is imperative that accountants in both private and public practice be thoroughly familiar with requirements relating to renegotiation and termination and that they should clearly comprehend their own responsibility therein.

Abstract The article presents a critique of the tentative statements of accounting principles. Characteristics of separate industries, and of units of the same industry differ; and these differences require diverse application of recognized accounting principles to the solution of analogous but nevertheless dissimilar problems. This experimental formulation of principles leaves its mark upon the development of accounting. The ultimate product will come into the hands not alone of the profession but also into those of the banker, business man, investor, and regulatory authorities. The ideal must contemplate clear simple statements which leave no room for ambiguity, in order that there may be a concise meeting of the minds. The author holds that rules should be stated simply as acceptable applications of recognized principles and not as mandatory procedures. This is the philosophy which underlies the standards of Public Accounting practice already established, in respect of audit procedure, which recognize that in a variety of instances other procedures may be substituted and that circumstances may justify the omission of procedures recommended.