Reviews the book "Federal Income Taxation," 1st ed., by Robert S. Holzman.

This article focuses on the broad versus narrow concepts of internal auditing and internal control. The expansion of business and the introduction of the corporate form of business organization long ago forced the separation of the investor from management. This divorce of investors from management, together with the demands of creditors, led to the development of periodic audits by independent outside public accountants. This same expansion of business with the resultant departmentalization and specialization by operation and by function, has also led to a widening gap between management itself and the operating units of the business. The subject of "Internal Auditing and Internal Control" supplies with a broad base from which to operate in our discussion here today. Perhaps some brief definitions of terms will be helpful to the purposes. It seems that there are two somewhat different concepts of internal control which should be recognized in discussions. The narrower of these two concepts appears in the definition of the term in auditing texts.

As a service to the forty-eight states and four territories which use the examinations prepared by the American Institute of Accountants the Institute will grade the candidate's papers and recommend grades to be granted there on by the local boards involved. Papers from some fifty-five hundred candidates were graded by the Educational Director's office in connection with a recent examination. The very weight and volume of this number of papers is imposing. The significance of the resultant grades to the candidates and to the profession of public accounting makes the grading process most important. The methods used to secure uniform and reliable results in this work will be of interest to those concerned with methods of testing and passing upon the qualifications of candidates for the CPA certificate. Under the grading system used by the Institute in Auditing, Theory and Law, where the grading is on a positive basis, it is impossible for the candidate to receive all the points his knowledge might justify if his answer is too brief. Relevant points, assigned some credit in the grading, may easily be omitted in short answers.

Reviews the book "Federal Income Taxation," by Charles J. Gaa.