A Statement of Basic Accounting Theory: A Review Article

The Committee to Prepare a Statement of Basic Accounting Theory was charged to develop an integrated statement of basic accounting theory which will serve as a guide to educators, practitioners, and others interested in accounting. The differences are not only in the specific suggestions on valuation, e.g., current cost, non-transaction data, but also in two more important respects: methodology and world-view. It is not self-evident to Mr. Morrison, who thinks that the Statement is only "of certain aspects of accounting But it offers little in the way of basic accounting theory as a foundation for a body of sound accounting principles". It is more difficult to judge how the Statement will fare in guiding educators. The committee has invited the reader to view accounting as a measurement- information system. The standards and guidelines readily follow from the new view, and the relevance standard is correctly considered to be primary.