Profit economy;

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VOL. XII NEW YORK, FEBRUARY, 1929 No. 2
The Profit Economy
IN this age of uneasiness, when social,
religious, and economic traditions are
being challenged by thinkers, both pro­found
and loose, it need not seem strange
if accountants wonder what will be the
effect of having so many other interests
think about accounting.
The interests to which reference is made
are represented by commercial bankers,
investment bankers, credit men, comp­trollers,
lawyers, appraisers, engineers,
statisticians, and statute-makers.
These forces, all with the best of inten­tions,
sometimes have the appearance of
seeking to mold and improve accounting,
and some of them accountancy, because of
the vital part these subjects play in matters
with which they are concerned.
Each party, in his effort, approaches the
matter from his own particular angle.
Each has a background, peculiar to his
experience. Each sees the problems
through different eyes.
The result to the accountant who comes
in contact with these various interests is a
condition of bewilderment; of wonder as
to how the divergence of thought will end;
and of anxiety as to how he can compose
and harmonize various differences of
opinion, still preserving the traditions
which guide him in his chosen occupation.
Statutes in some jurisdictions make it
possible to violate some of the fundamental
principles on which accounting is based.
The commercial banker may argue for
practices which are ultra-conservative.
The investment banker may not be
criticized, perhaps, if he strives for a set-up
which will show the best picture possible.
The credit man wants to have things
held down.
Comptrollers may wish to avail them­selves
of statutory provisions which are
liberal to corporations. Lawyers, because
of their training, usually can find authority
in decided cases on either side of a con­troversy.
Appraisers have some advanced ideas
with respect to values and depreciation.
Engineers are apt to be precise and ex­acting.
Statisticians sometimes have views
which are novel and interesting.
Thus, accounting may be likened to a
football, which the accountant tries to
guide to its goal. The lot of the account­ant
becomes hard. Sometimes it appears
little short of impossible.
But out of the darkness gleams one
shining light at least. Business operates
under what is known as a profit economy.
The profit economy requires that there
shall be a closed transaction before gain