The article discusses the needs of financial disclosure which are made to security holders and other interested parties. Disclosure that may mislead one financial analyst may result in misleading thousands of other people in the economy. The article presents results of interviews with financial analysts in specific areas of criticism of disclosure and proposed solution by them. For example, in leasing, the current amount to be paid under the leases is not always stated, nor is the total amount contracted for payment over the years. Property under the leases is not described, nor are real and personal property segregated. According to the analysts, a disclosure should be made in a manner permitting facts about long-term leases to be readily obtainable from published statements. A specific determinable liability, both long-term and current portion, does in fact exist as created by the contract and should be recognized, the asset should be capitalized, and both the asset and liability should be placed in the body of the balance sheet. Others felt that capitalization is not essential, but that expansion of the footnote to include all pertinent information is needed.

Reviews the book "Auditing: The Examination of Financial Statements," by Robert L. Grinaker and Ben B. Barr.

Reviews the book "Selected Papers: Nineteenth Annual Institute on Hospital Accounting and Finance."

Auditing has been characterized by an extension of the audit examination into activities of the firm that were not previously included. In order that the audit by the independent accountant might better serve as an audit of management's performance, the examination by the accountant should include, an analysis of management's expectations for the coming year in the form of an anticipated statement of revenues and expenses, a pro-forma balance sheet, and a statement of expected sources and applications of funds. It should include a comparison of the audited financial statements for the current period with the anticipated statements prepared at the beginning of the period, indicating to some extent how well management has met its short-run objectives. It should also include use of a long-form type of report in which an analysis of the differences between expectations and realizations might be explained and evaluated. This would benefit, in some way, the management of the company, the stockholders and potential investors, creditors, competitors, and the government.

The article discusses about the teaching approaches to elementary accounting. Based on the results of the single measure of performance, which was the fifty-minute multiple-choice examination, it is possible to conclude that the different approaches to the teaching of the first course in accounting had no significant effect on the student's ability to perform on an examination of the type used in this article. Further, it may be concluded, at least in this instance, (1) that the use of television as a means of accommodating the increasing numbers of students in elementary accounting provides a teaching method that is at least as effective as the more conventional approach, (2) that there is no difference between the performance of (a) the students who received instruction for three periods per week, (b) those who received instruction one period per week with the instructional time equivalent to three periods per week, or (c) those who received instruction for four periods per week, and (3) that the use of the programmed learning materials as a substitute for certain portions of the text makes no significant difference in student performance.

The article discusses the distinction between the conventional and some of the suggested methods of reporting fixed assets as they affect business income. This is done by presenting an article by professors R.L. Dickens and J.O. Blackburn published in the April 1964 issue of the journal The Accounting Review. These published accounts aid stockholders and other outsiders to project the future earnings and financial condition of the corporation and to assist with the evaluation of the performance of management. According to the author, as the individual requirements of different users of published accounts are unlikely to be cognate, one set of accounts will scarcely fulfill the needs of all stockholders and other outsiders, no matter how "objectively" the asset values contained therein are determined. He suggests that replacement cost, "realizable value," "historic cost," and "historic cost adjusted for price level changes," can provide a basis upon which stockholders and other interested external parties can project the earnings and financial condition of the enterprise according to their own requirements.

Reviews the book "Dynamic Accounting," by Eugen Schmalenbach.

This article explores the business entity concept of the 1964 Concepts and Standards Research Committee of the American Accounting Association and its significance to accounting. The committee's study of the business entity concept has caused it to depart significantly from the concise statement of the concept contained in the 1957 Revision. The committee believes that in referring to concepts underlying the conventions of accounting the use of the term business is inappropriately restrictive. The committee suggests that, in accounting, the term entity concept be used. In accounting the entity with which one is concerned may be defined as an area of economic interest to a particular individual or group. The boundaries of such an economic entity are identifiable by determining the interested individual or group, and by determining the nature of that individual's or that group's interest. An economic entity encompasses the activities, events, and utilization of resources that affect the interest of the individual or group. Simply stated, the committee advocates a user-oriented approach in defining an entity. That is, accounting reports about entities are developed to meet the needs of particular individuals or groups.