Reviews the book "Basic Auditing Principles," by Arthur W. Holmes.

Reviews the book "Advanced Accounting: Comprehensive Volume," by Harry Simons and W.E. Karrenbrock.

Abstract The use of direct costing means its full fledged incorporation into the accounting process in terms of its effect on the determination of periodic net income and financial position. One of the most appealing results of the use of direct costing, particularly to the harassed and overworked cost accountants, is the elimination of all necessity of making any attempt to allocate fixed overhead costs, both initially to service and production departments and ultimately to units of product or jobs. Admittedly, simplicity in cost accounting methods with the attendant reduction in the cost of cost accounting represents a desirable objective, but only if the information produced by the simplified methods is not substantially less useful for internal managerial use as well as for use in reporting the operating results and financial position. An advantage often claimed for direct costing is that it focuses attention on the variable cost factors which are by their nature more subject to managerial control than those costs typically described as fixed. While it is perfectly true that management control is most important in connection with variable costs, it is difficult to see that direct costing offers more in this connection than a well organized system of standards for direct material, direct labor and variable overhead.

Abstract Fifty years ago the principal interest of those concerned with the financial data of business enterprises centered on the periodic display of assets and liabilities (balance sheet). Over the course of the last half century there is little question that a pronounced shift in the interest of the users of published corporate reports has occurred. Thus, at the present time the principal attention of investors, financial analysts, employees, and the general public is focused on the statement setting forth the periodic net income or earnings of the business, with the balance sheet being viewed".. . as the connecting link between successive income statements and as the vehicle for the distribution of charges and credits between them." This emphasis on the significance of the amount of periodic net income has resulted in a considerable amount of attention on the part of professional societies and regulatory bodies being directed toward the establishment of principles and procedures aimed at achieving a high degree of objectivity in the determination of periodic net income for the individual enterprise, with the resulting increased meaningfulness of the comparison of the operating results of two or more enterprises. It will be the purpose of this article to survey some of the accounting techniques which may be applied to affect the assignment of net income to successive accounting periods. As the title indicates, emphasis will be placed on the possibilities for smoothing or leveling the amplitude of periodic net income fluctuations.