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INFORMATION,
The Research Department in the Executive Office is a storehouse of
Think of "research" and you get the impression of people
experimenting with new and far-out concepts, people
sitting in ivory towers, spinning the web of accounting
ten years hence.
Haskins & Sells has a good share of pure research that
has given birth to new techniques like Auditape and
our statistical sampling methods. "But in our Executive
Office Research Department," says Hal Robinson, who
is partner in charge of it, "the plain fact is that our
number one function is to respond to requests for assistance
from the practice offices. We had over 500 requests
in 1966—and there was no relation to the ivory tower
in any of them. These requests demand consideration
right now, because our findings will be used immediately
to answer questions posed by clients."
As a practical matter, a time limit of one week has
been set for answering all but the most exhaustive requests
so as to assure orderly handling and still allow
priority handling for particularly urgent queries.
What the offices ask the Research Department for is
background information that they don't have the time
or facilities to gather themselves. Most of this information
directly concerns accounting matters. But often
enough the relationship is startlingly oblique, with questions
like "What was the quoted market for Company
A's stock on December 31, 1899?" or "Can you find us
a retail price level index for the southwest Texas area
for the years 1959 to 1965?" or "Please send examples
of 'phantom stock plans.'"
Sometimes this primary function of the Research Department
is called "answering practice office questions."
But calling it that can be misleading if it makes you
think the offices ask the point-blank question "How
should we account for the following transaction?" In
most cases the offices will answer that question themselves—
after they've been supplied the background
information.
Of course, a good number of accounting and auditing
questions do get answered in consultation with people
in the Executive Office. These are questions where the
business transactions involved present quite new twists,
and thus the answers need exploration or development
of Firm policy. They will usually be directed to Emmett
Harrington, who has primary responsibility for technical
aspects of our practice, or to Oscar Gellein for
accounting questions, to Ken Stringer for auditing, or
to Cy Youngdahl if an SEC filing is involved.
In many cases these questions come back to the Research
Department for background information. "Then,"
says John Tillotson, principal who's been fielding these
requests for seven years, "what do you do? Do you go
in—to Oscar Gellein, for example—and say, 'Here's all
the information we've gathered for you, but, of course,
we haven't tried to draw any conclusions from it'? No
we don't. I don't think anyone could search out all the
pertinent facts without also asking himself what the
answer is." Of course, whoever referred the question
recognizes this, so that he spends a good deal of time
with John or others in the Research Department probing
and discussing the question.
Almost any time you walk down the corridor that
stretches down the long back wing on the 23rd floor of
Two Broadway, you will see the occupants of several
of the offices hanging on to their telephones, talking to
someone in Boston, San Juan, Seattle, Honolulu, or
some place in between. "We prefer written communiques
in the first instance," says Hal Robinson. "For one
thing, it makes for efficiency in getting the question to
the right party in the E.O. For another, it forces the
person making the request to think through just what
he wants to know, and not infrequently it turns out to
be different from what he first thought it was. When
that doesn't happen till after the question gets to us,
time is wasted."
Nevertheless, most matters do get discussed on the
telephone at one time or another. Next to sitting down
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