  Accreting black holes and neutron stars in their hard (low) state show not
only very similar X/gamma-ray spectra but also that the behaviour of their
light curves is quite similar which can be quantified as having similar
power-density spectra and Fourier-frequency-dependent time/phase lags. Taken
together this argues for a common mechanism of the X/gamma-ray production in
these objects. This mechanism is probably a property of the accretion flow only
since it does not depend on the nature of the compact object. In this paper, I
review the observational data paying most attention to the properties of the
temporal variability such as the time/phase lags that hopefully can help us to
discriminate between different theoretical models. I also discuss the models
developed to account for the basic observational facts. Particularly, I show
that the commonly used Compton cloud models with constant temperature cannot
explain variable sources without violating the energy conservation law.
Alternative models where time lags are related to the spectral evolution during
X-ray flares are discussed and compared with observations. Compton reflection
from the outer edge of the accretion disc is shown to markedly affect the time
lag Fourier spectrum.
