Management’s Stake in Accounting Reform

by David Hawkins



Management and the public accounting profession are jointly responsible for corporate financial reporting. At present, the Accounting Principles Board, the committee of the American Institute of Certified Public Accountants concerned with accounting principles, is seeking to bring about some long overdue reforms in the area of financial accounting. Yet during the recent controversy over the appropriate accounting for the investment credit, it became evident that a number of businessmen are unaware of both the over-all purpose of the Accounting Principles Board and the importance to businessmen of the fundamental accounting issues the Board is seeking to resolve. This lack of understanding on the part of businessmen is particularly distressing, since the degree of success ultimately achieved by the Board will largely depend upon the support it receives from the business community. If support is lacking and the Board fails, it is possible that the determination of what constitutes generally accepted accounting principles will pass to some unreviewable government agency.

California Management Review

Berkeley-Haas's Premier Management Journal

Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

Learn more
Follow Us