[In this study, sections of working papers from audits performed by one office of a public accounting firm were obtained and investigated. The working papers contained the information documented from the preliminary evaluation of internal control over the accounts receivable/sales area. Data from the working papers were provided as input, and discriminant analysis was used to construct a descriptive model of the auditor preliminary evaluation judgments. The model correctly predicted about 80 percent of the individual auditor judgments, which is significantly more accurate than a chance model, and the importance of the presence or absence of particular control activities on the auditors' evaluations was investigated from the model.]

In this study, sections of working papers from audits performed by one office of a public accounting firm were obtained and investigated. The working papers contained the Information documented from the preliminary evaluation of internal control over the accounts receivable/sales area. Data from the working papers were provided as Input, and discriminant analysis was used to construct a descriptive model of the auditor preliminary evaluation judgments. The model correctly predicted about 80 percent of the individual auditor judgments, which is significantly more accurate than a chance model, end the importance of the presence or absence of particular control activities on the auditors' evaluations was investigated from the model.

The article comments on a comparative analysis of net realizable value (NRV) and replacement costing, in reference to the article written by Norton M. Bedford and James C. McKeown for the April 1972 issue of the periodical "The Accounting Review." The author agrees that goal congruence aspects of alternative accounting procedures should be considered in evaluating their effectiveness. He also emphasizes the overstatement of the NRV model. However, this should not be interpreted as a criticism of the NRV model.

The auditor's real and perceived independence and autonomy in the performance of the attest function seems universally accepted as a desirable attribute. This study utilizes interpersonal exchange theory to consider in detail some of the factors which may affect the relative power of the auditor to maintain independence in an auditor-firm conflict situation. The term "auditor" refers to a professional accountant who is hired by a company to perform an audit and render an opinion on statements to be provided for a third party. The specific conflict situation occurs when the auditor and firm do not agree on some aspect of the performance of the attest function. Under these circumstances, the firm may attempt to influence the manner in which the attest function is conducted. The firm, in attempting to influence the performance of the attest function, may pressure the auditor to take an action that violates acceptable auditing standards, including the rendering of an inappropriate opinion. Compliance with the firm's demands may lead to violations of professional standards which the auditor wishes to avoid. Failure to comply with the firm's demands may result in sanctions by the firm, including the possibility of termination of the engagement. The equalization of power between the auditor and the firm, resulting in a symmetrical power relationship, could lead to mutual accommodation.

The purpose of this study is to investigate whether the information content of executive earnings forecasts, as measured by changes in trading activity, differed depending on (1) the forecast horizon and (2) the magnitude of the predicted earnings change. The results of the study indicate that the information content of shorter term and longer term forecasts was virtually the same. With respect to the magnitude of the predicted earnings change, the results indicate that predictions of relatively large changes in earnings (greater than 40 percent) were associated with large changes in trading activity. However, no statistically significant relation between predicted earnings change and changes in trading activity was observed.