Auditing, Auditing process, Consistency, Accelerated Depreciation

Abstract The article focuses on the book "Effect of Circumstances on the Application of Accounting Principles," by R.K. Mautz. The degree of formalization in accounting is quite high, but perhaps it is becoming less so. Increasingly complex economic activity and organizational arrangements, as well as social and political pressures, are making it less possible to clothe all potential accounting situations with preprogrammed solutions. Though accounting remains predominantly governed by rules and procedures, and thus provides Simon-type "programmed decisions," relatively more and more accounting may call for what author James D. Thompson has labeled "judgmental strategies." Alienation, a word which has received considerable attention in the organizational behavior literature of late, has also been linked to formalization, especially where professionals are concerned. There are various stages at which performance may be influenced. It may be through selective recruitment, suitable training and socialization, or control of one's actions on the job. Recruitment into the profession is important and deserves attention.

Abstract The purpose of this study was to determine the incidence of reported changes in the consistent application of generally accepted accounting principles and practices, the nature of such changes, and their materiality. For a sample of 300 corporations chosen from Fortune's 500 and the New York Stock Exchange, changes in the principles of consolidation, the methods of computing depredation, and valuing inventory were found to be the chief reasons for auditors' qualifications during the nine years, 1955-1963. In general, there was relatively little concentration of qualifications for consistency among companies, industries, or CPA firms--either in total number, category, or year. As might be expected, more of the changes resulted in increasing reported net income than in decreasing it. The striking finding, resulting from the examination of the materiality of the reported changes was the predominance of those with an immaterial effect on net income. Possible "obvious" explanations were examined and found to be unsatisfactory. In response to Professor McCosh's admonition, it would appear from the data reported above that, if anything, accountants are overly zealous in disclosing consistency changes though they may not be as diligent in reporting the effects on net income. But, can readers of financial statements assume that this standard of reporting changes with little or no effect on net income is held by all accountants and is applied uniformly? This question will require further study.

Abstract Reviews the book `Auditing As Independent Authentication,' by Peter W. Wolnizer.

Abstract Reviews the book "Computer Auditing," by Andrew D. Chambers.

Abstract The article provides information on an alternative research methodology course for a master's degree in accounting. With the advent of a more generalized business degree at the master's level, the requirement of a master's thesis has become less common. As a result, many master's degree students never have the opportunity of performing an extensive independent research effort under faculty supervision. The problems facing practicing accountants of the future promise to be increasingly complex. A course providing experience in the employment of investigative techniques may assist the future accountant in analyzing these problems and in developing and appraising alternative solutions to them. The illustrative readings are used to add an accounting perspective to the topic being considered. These illustrative articles were selected in an attempt to put the basic ideas into a context more relevant to the student's interest. Hopefully this background will enable the future practitioner to evaluate the research of others. An ancillary benefit may be provided for those students who choose to contribute to the literature. They should have a stronger methodological base for doing so.