A Man of Principles

BY SAMUEL H. COPPOCK

Your interview with Robert Pozen (“Seeking Clarity ,” Oct. 07, page 30) was intriguing. My first question is: Who on the JofA staff interviewed him, and why was the byline not disclosed?

The most insightful question was, “How can more principles-based standards work in the U.S….?” His answer was, “No one wants to exercise judgment…it is less predictable how the courts would react to the judgment calls made by preparers or auditors….”

So my second question is this: When did “rules-based accounting” replace the preparer’s and the auditor’s judgment? What standard was that? Who decided this? Have courts and regulators thoroughly and completely discredited our judgment? If so, then why do states license us?

By way of reference, consider the article, “ It’s Time to Simplify Accounting Standards,” (March 99, page 65) by Dennis Beresford. A reprint of that may be timely. Today, international standards, a “principles-based” approach, are on the verge of overwhelming our arcane, brittle and increasingly obsolete U.S. GAAP.

I applaud the JofA for its interview with Pozen. Please continue to actively cover the continuing demise and collapse of “rules-based” accounting.

Samuel H. Coppock, CPA
Chandler, Ariz.

Editors’ note: In general, bylines in the JofA are reserved for authors. In the case of the interview with Mr. Pozen, the JofA solicited potential questions from a variety of technical experts. Several members of the JofA staff worked together to edit the questions and coordinate various elements of the interview.

Mr. Beresford’s article is available here.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.