ABSTRACT
The Committee on Accounting Procedure, accountants had not devised a workable system for writing accounting standards. The Accounting Principles Board (APB) was only marginally more successful at improving financial reporting than its predecessor had been. The stock analysts complained that it was impossible to compare the earnings of different companies. A Financial Accounting Standards Advisory Council, composed of between 20 and 30 economists, attorneys, accountants, auditors, securities analysts, bankers, and educators, ensures the Financial Accounting Standards Board hears a variety of viewpoints. The financial press questioned why auditors failed to discover or report illegal campaign contributions, unrecorded slush funds, secret bank accounts, bribes and kickbacks by more than 200 major corporations. The bitter debate over pooling–of–interests accounting destroyed faith in the APB’s ability to set accounting standards. The well publicized accounting scandals such as National Student Marketing and Equity Funding raised doubts about auditors’ ability to protect the public from fraud.
