How it feels to be a gored ox: Eight years with the Accounting Principles Board;

              Eight Years with the Accounting Principles Board
HOW IT FEELS TO BE A GORED OX
By DONALD J. BEVIS / Retired Partner
Risks and Rewards
"My greatest experience in 40 years of public accounting/' says Donald Bevis,
"was my tenure on the APB, from 1965 until the Board's demise in 1973,
when it was succeeded by the Financial Accounting Standards Board."
As a measure of his experience, he cites the number of Board
pronouncements during that eight-year period:
• 26 Opinions (Nos. 6 through 31) and approximately 200 Accounting
Interpretations of these Opinions;
• 3 Statements;
• 7 Accounting Research Studies;
• 19 Industry Audit and Accounting Guides. (The stated accounting prin­ciples
and practices of these guides required the approval of the APB.)
"During that period/' he says, " I conversed with the most knowledgeable
and capable accountants in the profession—in practice, industry, government,
and the academe. These discussions, plus others with people in the
financial community, greatly influenced my decisions on accounting issues.
An initial conclusion was not necessarily the final one. I also learned to
appreciate that there is more than one informed opinion on any accounting
principle or its application.
"Considering the fact that APB work was voluntary," he says, " i t was
amazing to note the amount of time spent. For many members, including
myself, it became almost a full-time duty: board meetings, committee
meetings, night sessions, reams of correspondence, public hearings, draft
pronouncements, and other activities. To this must be added the volunteered
time of observers and advisers to Board members and those working on
Industry Audit and Accounting Guides and Board-authorized research studies.
In addition, one cannot overlook the time freely given by personnel
of the SEC and other government bodies, together with the efforts of
industry and accounting organizations, in developing information and
commentary on proposed pronouncements. Finally, invaluable service was
rendered by the AICPA staff. I would estimate that in the last several
years, when the output was greatest, the annual cost was close to $2.5 million.
This compares to a proposed annual cost of $3.5 million for the FASB."
All of the material accumulated by the Board concerning its unfinished
business has been made available to the FASB. These include Industry
Audit and Accounting Guides and Accounting Research Studies in process.
Some of the unfinished APB items are on the first priority list of FASB.
Criticisms of the Board
It is often said that the Accounting
Principles Board did not deal with
fundamental issues but spent too
much time "putting out fires." I be­lieve,
however, that a rereading of
the Opinions and Statements will
demonstrate that the APB did deal
with many fundamental issues on ac­counting
principles and financial re­porting.*
Furthermore, because of the rap­idly
changing business and economic
environment, it was necessary to put
out fires, ignited in some cases by
*Good examples are the Opinions on Accounting for
Income Taxes, Reporting the Results of Operations,
and The Equity Method of Accounting for Investments
in Common Stock.
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