problems of a particular equation in the model. Examples are given. Further generalizations are also considered but only conditional results are given. Further work is suggested.

The work of independent auditors involves two basic activities evidence collection and evidence evaluation. Substantial agreement exists concerning the types of evidence that should be collected in particular situations and the appropriate collection techniques. The evidence-evaluation activity, however, is less susceptible to codification. As a result, the auditing profession relies heavily upon professional in evaluating audit evidence. For example, the AICPA has stated that of the independent auditor's work in formulating his opinion on financial statements consists of obtaining and examining evidential matter. The measure of the validity of such evidence for audit purposes lies in the judgment of the auditor. 1 The importance of judgment in auditing is accepted almost without question; yet auditors' judgments are seldom subjected to systematic research. A typical rationale for this situation is the AICPA's statement that 'judgment is the most important factor in the making of any audit, but in many situations it is practically impossible to write out in specific language how the auditor applies judgment. 2 The study reported in this paper was concerned with the evidence-evaluation function of independent auditing. One type of audit evidence was * Assistant Professor, University of Texas at Austin. This paper is based upon the author's doctoral dissertation; for the full report, see R. H. Ashton, Judgment Formation in the Evaluation of Internal Control: An Application of Brunswik's Lens Model (Minneapolis: University of Minnesota, 1973).

A convertible bond is a hybrid financial instrument that incorporates features of a bond (fixed income security) and an equity claim (usually common stock). In most instances the convertible can be exchanged, at the holder's option, for the common shares of the corporation issuing the convertible. The conversion value, or stock value, is the market value of the common shares for which the convertible can be exchanged. The bond value or floor price is the market value of an equivalent bond that does not include a conversion feature. The market price of a convertible will be the conversion value or the bond value, whichever is higher, plus a premium. The purpose of this paper is to develop and test a model which estimates the premium. The premium estimated is defined as the difference between the market price of the convertible and the bond value or conversion value, whichever is larger. No consideration will be given to convertible preferreds.

This paper considers the problem of the investor who has numerous opportunities for revising his portfolio and whose choices are governed by a utility function defined on ‘terminal’ wealth, U0(x0). Attention is focussed on the behavior of the induced utility functions of intermediate wealth with n periods to go, Un(xn), and the associated investment policies. Conditions under which the functions Un(xn) will tend to isoelasticity have previously been given by Mossin and by Leland. In this paper, the conditions for convergence are weakened further, to the point where they appear sufficiently broad to encompass perhaps most utility functions of practical interest.

George H. Sorter, Martin S. Gans, Opportunities and Implications of the Report on Objectives of Financial Statements, Journal of Accounting Research, Vol. 12, Studies on Financial Accounting Objectives: 1974 (1974), pp. 1-12

Journal Article A Note on John Kain's "Housing Segregation, Negro Employment, and Metropolitan Decentralization" Get access Stanley H. Masters Stanley H. Masters University of Notre Dame Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 88, Issue 3, August 1974, Pages 505–512, https://doi.org/10.2307/1881951 Published: 01 August 1974

Journal Article Arbitrage and the Forward Gold Premium: Reply Get access John H. Makin John H. Makin The University of Wisconsin — Milwaukee Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 88, Issue 3, August 1974, Pages 502–504, https://doi.org/10.2307/1881950 Published: 01 August 1974

[This paper looks at some aspects of the three stage least squares approach to estimating simultaneous econometric models. Three stage least squares is derived along the lines of best linear unbiased estimators in classical regression, whereby it is indicated that the usual assumption of non-singularity of the disturbance covariance matrix is unnecessary. Consistency of the estimator is shown as is the irrelevance of exactly identified equations to the estimation of other equations in a model when three stage least squares is used. Also included are an easily computed test for the validity of all specified overidentifying restrictions, and a method of efficiently estimating the reduced form using only the information contained in structural equations that are thought to be well specified.]

centripetal, with a mode in the range D1 0.50 0.59, the corresponding NE being 2 1.69. The probable reason for this peak is that what had been relatively small specialist enterprises had entered one or other industry in which minimum efficient size is relatively large. As Gort (1962, p. 74) writes, successful entry (into such industries) will necessarily produce a high ratio of nonprimary to primary employment. This could lead to some bunching of values of D1 in the neighbourhood of 0.50. The evidence is consistent with this explanation, since enterprises classified to D1 0.500.59 had the lowest average size of enterprises in all of the size categories in table 5 except D1 1.