The development of generalized computer-audit programs makes an important contribution to the further advancement of the public accounting profession. as it builds a favorable image of the profession, reduces audit time for clerical operations, reemphasizes the importance of professional judgment, instills self-confidence into auditors, and attracts more well- qualified personnel into the profession. To allow auditors of tomorrow an opportunity to appreciate the potential of generalized computer-audit programs, the author has prepared one such program, dubbed as AUDIT-AID. The use of AUDIT-AID has indicated to students the significance of professional judgment, the importance of review of internal control, and the place of computers in auditing.

The main purpose of this article has been to look rationally at the area of income reporting. Reporting of earnings per share has certainly been controversial and has even led to charges that it has created a chain letter growth effect in the absence of real growth. The reason for this has been that earnings, as reported today, are an odd mixture of income determination and income distribution and little effort has been made to distinguish between the two concepts. Moreover, income as reported on a per share basis has been allocated among an arbitrarily determined number of shares representing a combination of past, present, and future transactions. Finally, current reporting gives no recognition to the critical difference between cash distribution of earnings vis-a-vis earnings retained and its corollary, the two class method of computing earnings per share. The points raised by the Accounting Principles Board against the two-class method are precisely those which support it. The Board seems to have forgotten that the holder of a convertible security is free to exchange that security for common at any time and that the only reason for not doing so is that the value of the convertible is greater than the value of an equivalent number of shares of common.

Introduction, 410. — Single-period versus multiperiod decision making, 411. — Simultaneous choice in a multiperiod process, 413. — Alternating choice in a multiperiod process, 416. — The method of backward induction, 417.— General quadratic profit functions, 420. — Reduced quadratic profit functions, 422. — Asymptotic results, 425. — The cost of competition and the benefits of trust, 427. — Conclusion, 428.

S. Clemhout, H. Y. Wan, Jr.; Learning-by-Doing and Infant Industry Protection1, The Review of Economic Studies, Volume 37, Issue 1, 1 January 1970, Pages 3

Helmut A. Hagemann has provided a useful analysis of reserve policies of central banks in his recent article in this Review. However, I am afraid that the unavailability of data has led him into wishful thinking about the value of the dependent variables in his exercise. I refer specifically to the use of (FIR)j, foreign exchange of country i, relative to total reserves of country i as a proxy for (D/R) i;1 dollar-denominated foreign exchange of country i, relative to total reserves of country i. Let us consider what distortions may arise from using (FIR), where (DIR)i ought to be. Let: