ABSTRACT

Cavanaugh cites various and widely diverse practices as examples of why uniformity is needed in regard to reporting on major accounting questions. He also comments that accountancy tends to rely on precedent rather than on the scientific method. The Commission’s approach to uniformity is advanced by the issuance of Regulation S-X in 1940. Prior to that, the opinions of the Chief Accountant, in the form of Accounting Series Releases, was an attempt to establish some uniformity. Specifically mentioned is ASR No. 4, in which it is stated that the lack of “substantial authoritative support” for a principle in the preparation of statements will, if material, lead to a presumption of the statements being misleading.