The Work of the Practice Review Committee
by EMMETT S. HARRINGTON Partner, Executive Office
Presented before the Maine Society of Public Accountants, Waterville, Maine—April 1965
IT is a pleasure to be here tonight to talk about a subject of great importance to the accounting profession, and one of great interest to me personally.
Lately there has been considerable criticism of the accounting profession—criticism by some segments of industry, by financial analysts,
and by members of the profession itself. Most of these critics have deplored the lack of uniformity in accounting practices and resulting
lack of comparability in financial statements; some have assailed financial reports for not disclosing sufficient information. It has also been asserted by some that the accounting profession is not meeting its responsibility to the public.
Actually, the situation is not as bleak as these critics make it sound. There is room for improvement, true, and the profession is aware of this need. Such awareness was evident in the decision to the Accounting
Principles Board in 1959, when one of the stated objectives was the "continuing effort to determine appropriate practice and to narrow the areas of difference and inconsistency in practice." Another step that is evidence of the continuing struggle for improvement was the creation in 1962 by the AICPA of its practice review committee "to encourage compliance with generally accepted accounting principles and auditing standards and to eliminate, insofar as possible, substandard reporting practices through education and persuasion rather than by disciplinary action."
THE PROBLEM OF SUBSTANDARD REPORTING
Over the years, business managements and professional accountants
have performed well in meeting their responsibilities to investors and to the public. Continuous progress has been made over the past thirty years. This is evident in a comparison of financial reports with those of three decades ago.
Most members of our profession possess a high level of competence,
and their work attests to this. Nevertheless, there is a small minority of accountants whose competence and performance are not up to the desired standards—and it is the work of these CPAs that