Reviews the book "Business Planning: Key to Profit Growth," by Patrick H. Irwin.

The article identifies the conditions for classifying accounting as a measurement discipline. A typical definition of measurement is "the assignment of numerals to objects or events according to rules." Defining measurement in this manner overcomes the objections mentioned above and insures that measures obtained via the various scales will be informative and consistent. A more satisfactory definition of measurement is the assignment of numerals to represent elements or a property of elements in a specified system on the basis of isomorphism or homomorphism existing between one or more empirical relational systems and one or more numerical relational systems. For example, if purchasing power, which is defined as the ability of an object to command other objects and services in exchanges, is shown to satisfy the conditions above, more precise definitions of accounting concepts could be formulated. Similarly, in choosing a depreciation method for a particular asset, the accountants would choose the method which is believed to parallel more closely the decline in the purchasing power of the asset. If accountants are not willing to choose an economic property for accounting measurement, which approximates extensiveness, and to assume that the property is extensive, they must abandon their attempts to improve and to explain accounting via measurement theory.

The various aspects of cost provide the conceptual core of management accounting. Incremental cost and opportunity cost are particularly important concepts, since they provide the foundations for the accountant's contribution to decision-making. The article sets out to test the validity of the two concepts. It says that there seem to be some confusion as to the precise meaning of the terms incremental and opportunity cost. The confusion exists in the literature of management accounting, managerial economics, and pure economics. The article suggests that a definition, using systems terminology, can help to clarify the meaning of the two terms. It defines incremental cost as the sum of the opportunity costs of the inputs to a system, each input being used independently of other inputs. Opportunity cost is defined as the revenue sacrificed by not implementing the next best alternative output from the resources making up a system. It is seen that incremental cost provides a floor to opportunity cost. The task of measuring opportunity cost is synonymous with the task of maximizing the profit from the use of the resources under a firm's control. The accountant cannot be expected to tackle this problem alone.

Reviews the book "Theory of the Measurement of Enterprise Income," by Robert R. Sterling.

Reviews the book "Contemporary Studies in the Evolution of Accounting Thought," by Michael Chatfield.

Reviews the book "The Science Game: An Introduction to Research in the Behavioral Sciences," by Neil M. Agnew and Sandra W. Pyke.

The article presents information on the Seminar in Accounting Research at the University of Iowa. Universities are placing increasing, and we think appropriate, emphasis upon research by faculty members. Particularly at the graduate level, ideas are volatile and subject to continuing revision. In seminar discussions, student comments take priority over faculty comments. Similarly, student papers have scheduling priority over faculty and professional contributions, with an exception made for outside guests when conflicts arise. Participants in the Seminar are, on a regular basis, graduate students in accounting and the accounting faculty. Between faculty, even "unfair" comments are allowed, but restraint is exercised in arguing with students. Faculty participation, in the manner indicated, helps to erase the illusory distinction between teaching and research, and between faculty and graduate students at the graduate level. The Seminar in Accounting Research links the diverse interests of the faculty to a common educational goal.

Reviews the book "Federal Taxation of Capital Assets," by Robert S. Holzman.

The article examines the factors and relationships which explain the auditing process. The first relationship above is really a statement of the raison d'etre for both accounting and auditing in our present socio-economic environment. A basic tenet of current accounting theory is that the measurement of income is one of the primary bases for the allocation of resources. The received wisdom includes corporation managers utilize resources more or less efficiently. The efficient managers produce relatively higher incomes. The accounting measurement of income, attested to by the auditor, is reported to the capital market. The capital market, in turn, assigns favorable prices to the securities of the more efficient managements, thus enabling those managements to secure additional resources at favorable terms. When footnotes and other elements of financial statement presentation are considered, the number of different possible opinions on the scale becomes virtually infinite. The seven grades listed above are only the major ones, and other subsets may be distinguished without limit.

Reviews the book "Systems Analysis: A Computer Approach to Decision Models," by Claude McMillan and Richard F. Gonzalez.