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.

IN THIS paper we report the results of additional experiments with the short-run consumption function. In particular, in Section 2 we take up the problem of isolating expectation, inertia, and habit persistence effects and then go on in Section 3 to the problem of interpreting and estimating a real balance effect. As will be seen, the present work involves nonlinear relationships which have been estimated employing nonlinear techniques. Further, the problem of autocorrelation in distributed lag schemes is dealt with in a manner suggested by Fuller and Martin (1961). Aside from illustrating approaches to these methodological problems, the present study yields results on the role of liquid assets in determining consumption expenditures which, we believe, are of consequence with respect to establishing a direct influence of monetary variables on an expenditure relationship. This and other aspects of our study are discussed and summarized in Section 4.

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