Business point of view;

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VOL. V I I N E W Y O R K , M A R C H , 1924 No. 3
The Business Point of View
ONE hears sometimes a distinction
made between the business and the
accounting points of view. Wherein the
difference lies is seldom made clear. What
may be done from an accounting viewpoint
which is not correct from a point of view of
business? Conversely, how may the busi­ness
point of view differ from that of
accounting?
Accounting is intended to give expres­sion
to the financial facts of business. It
exhibits financial results, conditions, rela­tions,
leads to conclusions, and indicates
tendencies. It should disclose substantial
information of interest to any and all
parties related to an enterprise, whether
the parties are inside or outside the organi­zation.
Granted only that the parties have
either a legal or a moral right to the data,
accounting, to be true to its purpose, must
present the facts to anyone who may read
in a manner which is clear, understandable
and frank.
A balance sheet, as well as any other
financial statement, should be fair, honest,
impartial, simple, straightforward, truth­ful,
and one might almost say unreserved,
if it were not for the technical significance
which the last word has. But occasionally
a statement half as ingenuous as the limit
set by the foregoing prescription would
bring about consequences detrimental, if
not disastrous, to certain business concerns.
A business man who has an agreement to
submit a financial statement to banks,
trade-creditors, or anyone else at interest,
is obligated by the moral code to produce a
statement which fulfils all the conditions
demanded by accounting. There is no
warrant for hiding behind technicalities.
Any such procedure but defers the day of
reckoning, and in the meantime leaves a
smirch which further damages his case.
Open, fair, honest disclosure of facts, with
a determination to face and meet the prob­lems,
if any, involved therein, has been
found by wise business men to be the best
policy.
The points of view of business men and
public accountants should be identical, if
both run along the same moral plane. Ac­counting
and business procedure should co­incide
absolutely when guided by the same
moral standards. When business results,
or business success, would become preju­diced
by accounting statements true to
facts and moral ideals, the relationship be­tween
business man and accountant be­comes
impossible unless one becomes sub­ordinate
to the other. The accountant has