That hereafter, whenever practicable and reasonable, and where the aggregate amount of notes and accounts receivable represents a significant portion of the current assets or of the total assets of a concern, confirmation of notes and accounts receivable by direct communication with the debtors shall be regarded as generally accepted auditing procedure in the examination of the accounts of a concern whose financial statements are accompanied by an independent certified public accountant's report, and that the method, extent, and time of confirming receivables or a part thereof, be determined by the independent certified public accountant as in other phases of procedure requiring the exercise of his judgmentl

Journal Article Cournot's Dynamic Market Solution and Hosomatsu's Lemma: An Alternative Proof Get access H. Neudecker H. Neudecker University of Birmingham, and Middle East Technical University, Ankara Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 37, Issue 3, July 1970, Pages 447–448, https://doi.org/10.2307/2296733 Published: 01 July 1970 Article history Received: 01 October 1969 Revision received: 01 January 1970 Published: 01 July 1970

Business combination, Intangible assets, APB Opinion No. 16, Pooling of interest

In two previous articles [11] and [12] a family of normative models of the individual's economic decision problem under risk was presented. At the same time, certain implications of these models with respect to individual behavior were deduced for a class of utility functions. This paper will show that these models also give rise to an induced theory of the formation and operation of firms under risk for the same class of utility functions.

[Two stage least squares methods are used to estimate a postwar quarterly model of U.S. labor demand, supply, and wage adjustment. Analytical techniques are used to derive the long-run equilibrium properties of the estimated model. Short run properties are obtained by approximating the model in the form of two simultaneous difference equations. Simulation methods show the response of the model to an increase in the size of the armed forces.]

The time series behavior of earnings is an important area for empirical research because of its implications for related research in several areas of and finance. Although many other examples could be provided, three accounting issues immediately come to mind: (1) income smoothing, (2) the relative forecast ability of alternative income measurements, and (3) interim reporting. The hypothesis that management uses discretionary practices to smooth income was first posited by Gordon [21] and later tested by Gordon, Horwitz, and Meyers [22] and by Copeland [14] among others. As stated by Gordon, smoothing involves minimizing the deviations of reported income from some standard, where the standard is defined in terms of normal income. Normal income has never been precisely defined at the conceptual level, but in many cases it appears to have been used in the sense of the expected value of the process at a given point in time. A variety of models could be used, and in fact have been used, to assess the normal or expected value of income for a given period. Each model makes specific assumptions about the process generating income numbers. Any inferences drawn from empirical evidence regarding the existence of income smoothing (or the lack of it) are dependent upon the validity of the assumptions made about the underlying earnings process. Moreover, as shown later in the paper, for certain processes attempts to smooth income can have exactly the opposite effect. Yet the models used in the smoothing literature represent only a narrow range of the possible alternatives, little justification (either a priori or empirical) has been offered in their behalf, nor has there been any direct, rigorous investigation of the underlying nature of the earnings process itself.

Journal Article Professor Samuelson on Free Enterprise and Economic Inefficiency: A Comment Get access H. Stephen Grace, Jr H. Stephen Grace, Jr University of Houston Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 84, Issue 2, May 1970, Pages 337–340, https://doi.org/10.2307/1883020 Published: 01 May 1970

I. Introduction, 472. — II. The model: assumptions and notation, 474. — III. Derivation of the model, 477. — IV. The utility of wealth, 478. — V. Borrowing constraints: an example, 480. — VI. Concluding remarks, 486.

This paper develops a sequential model of the individual's economic decision problem under risk. On the basis of this model, optimal consumption, investment, and borrowing-lending strategies are obtained in closed form for a class of utility functions. For a subset of this class the optimal consumption strategy satisfies the permanent income hypothesis precisely. The optimal investment strategies have the property that the optimal mix of risky investments is independent of wealth, noncapital income, age, and impatience to consume. Necessary and sufficient conditions for long-run capital growth are also given.