ABSTRACT
McDonald cautions that investors are not interested in technical accounting disputes; they look at the accounts through the statements and are likely to turn to the income statement to see the end result. They are not aware of the judgment used in determining the figures reported nor the impact of using different principles. He stresses the need for objectivity and uniformity in accounting principles and practices and cites examples where non-operating profits were credited directly to earned surplus. This leads to a discussion of the “all inclusive” concept and the SEC’s insistence on the use of that concept.
