Developing and Implementing Higher Professional Standards in Accounting

Abstract

Efforts to promote a greater degree of in financial reporting have been largely centered in the American Institute of Certified Public Accountants, the national professional organization of practicing accountants. In addition to providing the forum for the most effective work yet done in the direction of attaining improvement in accounting principles, the AICPA has achieved much in the way of up-grading the profession generally by work in the fields of legislation, ethics, education, public relations, and standards for admission to practice. The considerable attention being given to current efforts in the area of principles should not obscure these other efforts toward achieving for accountants a clear entitlement to, and recognition of, professional status. The uniformity movement is the most important development in accounting in recent years and raises significant problems concerning the implementation of the requirements that may emerge from the debate. The methods to be employed by the AICPA and state CPA societies to assure adherence to new and stricter professional standards are far from clear, as the recent flurry over the effect to be given to opinions of the AICPA's Accounting Principles Board amply demonstrates.' Of equal importance is the question of the extent to which the disciplinary power of the professional associations will be used to implement standards laid down by the AICPA. Finally, the manner in which state regulatory machinery might be employed to implement new standards fashioned by the profession ought to be considered. All these questions must be viewed in the light of another sanction that promotes adherence to professional standards-the specter of auditor's liability, a subject that is treated elsewhere in this symposium. The accounting profession, like other elements in American life, has a preference for self-regulation over regulation imposed from without, by legislation, government agency, or judicial intervention. The mechanics of self-regulation must be considered if the responsibility is to be met in time to avert external control. Maintenance of public confidence in the profession is a concomitant and essential goal.