Abstract Reviews the book "War Profits Taxation and Special Wartime Reserves," by J. Keith Butters.

Abstract The article presents information on accounting theory and its current problems. Accountants who have been concerned with a more precise phrasing of accounting theory have attempted to formulate standards by which the bulk of accounting procedures may be guided. A consistent framework of standards is needed to serve as a basis for judgment in constructing and interpreting financial statements. Accounting standards should be systematic and coherent, impartial and impersonal and in harmony with observable, objective conditions. The responsibilities of the profession have increased, so has the profession's independence. If it should be emphasized, which is perhaps not necessary: (1) that the reporting of periodic income should include, as a regular element, charges to provide for the payment of refunds or additional costs of a period and (2) that full reliance upon the genuineness of the need for the charge and the honesty and accuracy of the estimate would be given if a certified public accountant subscribed to the figures, then the independence of the accountant would be further strengthened and the usefulness of this reporting improved. The acceptance of such a position by writers on theory would have an important secondary result in that it would provide a better integration of auditing practice and accounting theory.

Abstract This article focuses over the history of inventory valuation. The supposition that early evidence of the use of cost-or-market grew out of tax considerations is subject to other and more general objections. It might be expected that a method designed for tax purposes would include some reference to its purpose. But instead the explanation given is the kind which would appear if there was an accounting policy in effect that sought to recognize economic losses which were soon to be realized through sales-the statement that "their price has gone down." Furthermore, general conditions of what might somewhat inappropriately be called "public finance" in the fourteenth and fifteenth centuries were such as to make such a mild device as cost-or-market for the closing inventory insignificant as a tax-avoidance scheme. The contention has been made that the policy of write-downs disclosed above was an effort at tax avoidance, made in a time when ad valorem levies upon personal as well as real property were heavy, and hence has no general significance for accounting principles.

Abstract The main aim of this article is to review some of the serious criticisms of cost valuation of inventory and to formulate a concept, which might be considered an "earning power" valuation. The system of income reporting which identifies costs with units of product and matches the cost of individual units with revenues resulting from sale of the units has been said to rest upon an analogy between the determination of the ultimate profit for an enterprise and the periodic computation of income. Proponents of the thoroughgoing cost method recognize this and make partial allowance for it. Since these compromises are made the door is left open for further adjustment of the concept of acceptable accounting procedure. It is difficult to see why a recognizable loss of usefulness, or "earning power," in the case of obsolescence, which is admitted by cost adherents, should be treated differently from a loss of sales value through the change in demand. Merchandise has only one quality significant to accounting: the power to bring in revenue.

Abstract Reviews the book "Auditing Principles," 3rd ed., by Howard F. Stettler.

Reviews the book, "Statistical Sampling for Auditing and Accounting Decisions: A Simulation," by Robert W. Vanesse.

Reviews the book "Eleventh Annual Report of Stockholder Activities at Corporation Meetings," by Lewis D. Gilbert and John J. Gilbert.

Abstract During the year 1958 the Committee on Certified Public Accountants (CPA) Examinations of the American Accounting Association continued to cooperate with the Director of Education, Mr. Wilton T. Anderson and the Board of Examiners of the American Institute of Certified Public Accountants in stockpiling questions in Theory of Accounts for the CPA Examinations. The Committee actively encourages all members of the Association to prepare questions and model answers of the type which the members think should be used in future examinations.