Improving Business Reporting--A Customer Focus: Meeting the Information Needs of Investors and Creditors; and Comprehensive Report of the Special Committee on Financial Reporting.

Abstract This article reviews the reports Improving Business Reporting - A Customer Focus: Meeting the Information Needs of Investors and Creditors and Comprehensive Report of the Special Committee on Financial Reporting, by the American Institute of Certified Public Accountants. The AICPA's release of the report in September 1994 was a major production. First, a 20-page, glossy, full-color Brochure was mailed to the AICPA membership. That primer is adorned with marginal accolades from financial luminaries, only a little less adoring than the critics' quotations found in motion picture ads. The Brochure contains only the Committee's recommendations, some minimal rationalizations and the names and affiliations of the Committee members. The first hint of problems: the Committee, mostly accountants, included not one user of financial statements. The Report has essentially two major elements: a series of specific and somewhat unrelated recommendations to regulators and standards setters, the Committee's euphemisms for the Securities and Exchange Commission and the Financial Accounting Standards Board, and a call for a supposedly innovative Comprehensive Business Report. There are 20 to 34 recommendations, depending on how one interprets the inconsistent numbering scheme. Many are unexceptionable exhortations to continue already started projects: to harmonize international accounting, to develop reporting for new financial instruments and to form another committee to implement the recommendations of this Committee.