If Only We Had Listened to Ross S. Skinner!
HEC Paris (Groupe HEC)
HEC Montréal - Stephen A. Jarislowsky Chair in Governance
Canadian Accounting Perspectives, Vol. 4, No. 2, pp. 257-268, 2005
Ross S. Skinner built his intimate knowledge of the intricacies of the art of accounting through a very long and rich career as an accounting philosopher. This allowed him to both observe, and be part of, the formalisation of today's GAAP. The longevity of his career and the particular moment when it took place allowed him to live the slow evolution of our accounting model from a principles-based approach to more of a rule-based one. The objective of this paper is to look behind the accounting figures, which are the product of more or less rules and judgement, and to discuss some recent events that rocked the auditing and accounting profession. This will be done in light of the views Ross Skinner (henceforth RS) expressed in his Judgment in Jeopardy 1995 article. A perusal of RS's curriculum vitae shows that he had a keen interest in accounting history. Therefore, we have chosen to begin our contribution to this forum by referring to what Pacioli described as venture accounting. We use this notion to introduce our discussion of financial reporting which has since become an important instrument of resource allocation and a challenge for professional judgement. This brings us to consider some of the ideas RS presented in his article on accounting judgement as visionary. Had we listened to him, perhaps we could have avoided some of the costly changes and additions recently imposed on our governance system such as the creation of the Canadian Public Accountability Board and the tightening of several laws and regulations.
Number of Pages in PDF File: 21
Keywords: Financial reporting, principle-based, rule-based, governance
JEL Classification: M41, G18, G38, M44
Date posted: December 29, 2005