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 Principles-Based
Accounting
There
is currently an intense debate over the merits of rules-based
accounting versus principles-based accounting. In the opinions
of these authors, the debate is a waste of time, because
for at least 35 years, the law has required adherence to
principles-based accounting. The fact that practitioners
have ignored the law is one reason for the accounting profession’s
current difficult situation. Law
comes into existence not only through legislation, but also
by regulation and litigation. Laws from all three sources
are binding, one source no less so than another.
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On Solving Problems Before They Become Crises
Over the last few decades, budget cutbacks have resulted
in understaffing at many government agencies. Consequently,
some agencies, trying to ensure accountability, require
CPAs to provide opinions on cost reports that could extend
beyond their traditional audit work in connection with the
entity’s financial statements. A related consequence
of these broader cost-reporting requirements is that many
nonprofits and government agencies increasingly require
audit-related services but don’t want to pay for them.
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 Give
Me the Good and the Bright
Even
with the string of financial frauds that led to the Sarbanes-Oxley
Act of 2002 (SOX), some accounting professors continue to
wring their hands not over the moral failures of the profession,
but over attracting students who are “the best and
the brightest.” A
study by professors Thomas Frecka and William Nichols, published
in Issues in Accounting Education, found that the
best MBA programs are attracting students with significantly
higher test scores than are the top graduate accounting
programs. Full
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