In order to have good financial and accounting administration in a Government department or bureau, or in a business enterprise, we need to concern ourselves with certain fundamentals like a good general conception of the role of financial and accounting administration in the entire management of the unit. There must be a will on the part of the entire management to use accounting tools purposes. There must be a good organizational plan, both for the entire unit and for the accounting department. There has been a failure in public administration circles to recognize the role of accounting in public administration. The whole field of accounting is one of the last management areas to be developed. Accountants bear a fair share of the blame for this lag. It is believed that public administration is quite a way behind business in the development of the conception of the role of accounting in management control. It seems that there may be two reasons for such a lag in the Government sector: (1) There has been no overwhelming, compulsive urge in Government, such as exists in competitive business, for economical administration with intention to control of costs; and (2) the patterns of public administration in the Federal Government are fixed very strongly by tradition and the straight-jacket of statute.

Reviews the book "Auditing Theory and Its Application," by Arthur Warren Hanson.

It would seem appropriate that Some Tentative Propositions Underlying Consolidated Reports presented at the last annual meeting of the American Accounting Association, be expanded to include the more complete discussion of the reasoning followed in arriving at the conclusions it contains. The treatment in consolidation of earned surplus of subsidiaries arising prior to date of acquisition of control. The accrual of equities in undistributed earnings of subsidiaries in accounts of the parent. The determination of reserves for losses on investments in subsidiaries based on ultimate realization rather than on amounts of operating losses. The exclusion from consolidation of nonhomogeneous subsidiaries. It is submitted that these propositions are neither in accordance with generally accepted practice nor based on any logical assumptions. In effect they state that the parent's equity in earnings of a subsidiary during the period when an interest was owned less than controlling may constitute earned surplus to the parent only if received prior to acquisition of control but not if received after acquisition of control.