Sound accounting;

              ATLANTA PORTLAND
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BIRMINGHAM
BOSTON HASKINS & S E L LS PROVIDENCE
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CBHUAFFRALLOOT TE SAN DIEGO
CHICAGO CERTIFIED PUBLIC ACCOUNTANTS SAN FRANCISCO
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CINCINNATI TULSA
CLEVELAND WATERTOWN
DALLAS
DENVER BULLETIN DETROIT BERLIN
JACKSONVILLE LONDON
KANSAS CITY MANILA
LOS ANGELES PARIS
MINNEAPOLIS SHANGHAI
NEWARK
NEW ORLEANS EXECUTIVE OFFICES
NEW YORK 15 BROAD STREET. NEW YORK HAVANA
PHILADELPHIA MEXICO CITY
PITTSBURGH MONTREAL
VOL. X I NEW YORK, SEPTEMBER, 1928 No. 9
Sound Accounting
EVIDENCE is accumulating gradually
to indicate that accounting may be
regarded as sound or unsound, according to
the faithfulness with which it follows
economic doctrines and the facts of given
situations.
The past has seen many occasions when
accounting statements were but jumbles of
figures; when the way in which a situation
was expressed depended upon the vagaries
of the individual who could exercise the
greatest amount of power; when the easiest
way out of an accounting controversy was
the line of least resistance; when it was
frequently expedient to allow that a matter
might be treated in either of two ways,
meaning that as long as there was some
reason assigned for the treatment not
much else mattered.
Today one finds encouragement in the
fact that an increasing amount of thought
is being given to the theory of accounting;
that convictions are being developed with
respect to what constitute right ways and
wrong ways of handling various trans­actions;
that it is unethical for account­ants
to lend their names to statements
which obscure the facts and hide behind
the skirts of ingenious theories.
One need not charge misleading intent
to those who have occasion to deal collater­ally
with the institution of accounting if
they bend the product thereof to their
needs. If the lawyers make statutes which
are in violation of established economic
doctrines, it is because they see practical
benefit in the violation. If investment
bankers ignore certain factors of expense in
looking at a set of figures, it is because they
are interested in only one angle of the
situation. If appraisers advocate the es­tablishment
of depreciated reproduction
value as a basis for carrying property on the
books, it does not follow that they are
attempting to indicate to a client that he
has made a profit by writing up his prop­erty
values to that figure.
The various developments in current
practices growing out of revised corpora­tion
statutes, corporate financing, and
revaluation of assets have given the
accountant many accounting problems to
think about. It is not sufficient that he
should think about them. It is important
that he should reach sound conclusions
concerning them, and, having done so,
assume a leadership in advocating theory
and practice which are sound. Thus, only,
will the accountant achieve the respect and
consideration to which any man is entitled
when he knows more about his subject
than any one else, and when he contributes
something to the advancement of civili­zation.