Abstract The article presents information on accounting theory and its current problems. Accountants who have been concerned with a more precise phrasing of accounting theory have attempted to formulate standards by which the bulk of accounting procedures may be guided. A consistent framework of standards is needed to serve as a basis for judgment in constructing and interpreting financial statements. Accounting standards should be systematic and coherent, impartial and impersonal and in harmony with observable, objective conditions. The responsibilities of the profession have increased, so has the profession's independence. If it should be emphasized, which is perhaps not necessary: (1) that the reporting of periodic income should include, as a regular element, charges to provide for the payment of refunds or additional costs of a period and (2) that full reliance upon the genuineness of the need for the charge and the honesty and accuracy of the estimate would be given if a certified public accountant subscribed to the figures, then the independence of the accountant would be further strengthened and the usefulness of this reporting improved. The acceptance of such a position by writers on theory would have an important secondary result in that it would provide a better integration of auditing practice and accounting theory.
Lawrence L. Vance (Sat,) studied this question.