Do the Principles for Financial Reporting Recognized by the American Council on Education Constitute Generally Accepted Accounting Principles for Nonprofit Organizations?
Presented before the Eastern Association of College and University Business Officers, New York — March 1969
WHEN OUR MODERATOR invited me to speak today, he suggested that
I address myself to problems of reporting what might arise as a result of the recommendations contained in the revised edition of College and University Business Administration (CUBA). The question that occurred to me immediately, probably because I am a practicing certified public accountant, was, Do the accounting principles recognized by the American Council on Education (Council) and contained in the revised edition of CUBA constitute generally accepted accounting principles?
This question is relevant to me professionally because it bears on the type of opinion I would express on financial statements that conform to or deviate from the recommended principles contained in the revised CUBA. The question should be relevant to you as college and university business officers because adherence to generally accepted accounting principles best achieves the objective of fair, consistent, and uniform reporting being demanded increasingly by governmental and private agencies, donors, creditors, and the general public.
I first approached this question by researching the applicable literature
of the American Institute of Certified Public Accountants, seeking some reference therein to the earlier 1952 edition of CUBA or to the current one. My research, while not entirely fruitless, did little to resolve the question. The AICPA has neither endorsed nor disapproved the applicability of the principles contained in either edition of CUBA, and it has not issued a pronouncement of its own on college and university accounting principles. In fact, the AICPAs' Accounting Principles Board has stated that its pronouncements have been directed primarily to business enterprises organized for profit.
Practitioners expressing opinions on financial statements on nonprofit
organizations are guided by the statement of the American Institute's
Committee on Auditing Procedure contained in Statement on Auditing Procedure No. 33 issued in 1963. With reference to nonprofit
by ALBERT A. CARDONE Principal, New York Office