The Accounting Historians Journal Vol. 16, No. 2 December 1989
THE ACCOUNTANT AND THE INVESTOR
by George O. May Senior Partner, New York Office Price Waterhouse and Company
When I was invited to be one of the lecturers in this series, I hesitated on account of a conflict of feelings. I was gratified by an invitation to lecture at an institution which means so much as Northwestern has come to mean in the field of business education, but I felt that ethics should be practiced rather than preached; and I was dismayed at the thought of contributing one of several lectures on the ethics of a single profession. When, however, Professor Custis suggested that I talk on the ethical obligations of the accountant to the investor my doubts were resolved, because the suggestion offered an opportunity to discuss before a sympathetic audience some of those phases of accounting practice which make it, to me, the most attractive of the professions which are closely allied with business; and an opportunity, also, to discuss some questions possessing a broader interest.
The Investor's Interest in Accountant's Work
Before discussing the ethical questions which arise between the accountant and the investor, it seems desirable to consider briefly the nature of the investor's interest in the work of the accountant and the conditions under which that work is ordi-narily done. Accountancy today has become an important pro-fession, the work of which varies greatly in character and purpose. Its work may, perhaps, be divided into three broad classes: first, the constructive work, such as the formulation and installation of systems of accounting; second, the detailed aud-iting of cash and other transactions; and third, the preparation and verification of financial statements. It is with this third class of work that the investor is more particularly concerned.
As published on pp. 26-54, The Ethical Problems of Modern Accountancy, Lectures Delivered in 1932, William A. Vawter Foundation of Business Ethics, Northwestern University School of Commerce, New York: The Ronald Press Company, 1933.