A Review of Recent Developments in Accounting Theory and Practice.

Abstract This article presents a review of the recent developments in accounting theory and practice. The term "recent" is unavoidably relative. It would not be appropriate to consider that it restricts a consideration of the subject only to the developments during the current year. Probably the most important recent development in the field of accounting is the rapidly increasing awareness of accountants of their social responsibilities. The financial reports of corporations, for which accounting is responsible, are the principal means, and probably the most important, by which investors and others having an interest can obtain information of their affairs. Accordingly, it is essential that the information so presented be clear and meaningful, truthful, and realistic. That accounting, so far, has failed in its obligation to present adequately the story of business is amply evidenced. One of the greatest criticisms which has been directed against accounting is that financial statements are presented in such a manner as not to be readable or understandable by the average investor or by labor. For some years there have been a few companies that have attempted to meet this criticism by abandoning the stereotyped balance sheet and income statement and the progressive extension of this practice is an interesting development.