Hurdman, Frederick H.

English

eGrove (Univ. of Mississippi)

Journal of Accountancy Volume 48 Issue 4 Article 1 10-1929 American Institute of Accountants: Report of the President Frederick H. Hurdman Follow this and additional works at: https://egrove.olemiss.edu/jofa  Part of the Accounting Commons Recommended Citation Hurdman, Frederick H. (1929) "American Institute of Accountants: Report of the President," Journal of Accountancy: Vol. 48 : Iss. 4 , Article 1. Available at: https://egrove.olemiss.edu/jofa/vol48/iss4/1 This Article is brought to you for free and open access by the Archival Digital Accounting Collection at eGrove. It has been accepted for inclusion in Journal of Accountancy by an authorized editor of eGrove. For more information, please contact egrove@olemiss.edu. The Journal of AccountancyOfficial Organ of the American Institute of Accountants Vol. 48 October, 1929 No. 4American Institute of Accountantsreport of the president*By Frederick H. HurdmanIt is both the duty and privilege of your president to report at this time concerning his stewardship during the past year and to present for your consideration such observations as occur to him after that experience.It seems unnecessary to inflict upon you a resume of the activities of the year, all of which will be covered in reports of committees and of the secretary. Suffice it to say that the In­stitute is in a healthy condition with every department function­ing, membership increasing and finances sound.Perhaps the outstanding accomplishment of the past year has been the completion of the revision of the pamphlet “Verification of financial statements,” which has been printed by the Federal Reserve Board. The manner in which this revised pamphlet has been received by accounting and banking organizations is in­dicative of the character of the work done by the committee which labored so long and diligently to make this pamphlet a document of value to the entire accounting profession.It has been said that no set rules can be laid down for the ac­countant; that his work is naturally the result of his own brains and that he must be the judge and assume entire responsibility for the extent and thoroughness with which he does his work. Nevertheless, it does seem wise and proper that out of our experi­ence we should set down, in some tangible form, for the guidance of those less experienced, what appears to be good practice and proper procedure.It is not claimed that this document represents perfection, but it is certain that if all practising accountants would be guided by the suggestions in this pamphlet there would be an immense im­provement in the quality of the work done. In most cases the procedure described in the pamphlet will be regarded as a mini-♦Delivered at the annual meeting of the American Institute of Accountants, Washington, D.C., September 17, 1929.241The Journal of Accountancymum and wherever conditions warrant the accountant will do more than is suggested.This same special committee which prepared the pamphlet “Verification of financial statements’’ is still engaged, in coopera­tion with the committee on education, in drafting a classification of accounting services and expects to complete its labor within the next few months. It is interesting to note how the term “balance-sheet audit” has been relegated to the discard. The committee found that while such a term was often applied to an audit there was not entire unanimity of understanding as to what it embraced, and it seemed unwise to have any term generally used which was susceptible of misunderstanding. The committee, therefore, has labored diligently to find terms which would not be misleading and would indicate as clearly as possible the kind of work to be performed.During the year the president and secretary visited accountants in Boston, Baltimore, Virginia Beach, Indianapolis, Cincinnati, Louisville, Kansas City, St. Louis, Omaha, Minneapolis and St. Paul. In all these places the officers were received with the utmost courtesy and found the accountants, whether they were members of the American Institute or not, interested in what is being done for the profession.Numerous matters of importance are being considered by the executive and other standing or special committees of the In­stitute. Your officers have constantly in mind the growing importance of our profession. The American Institute, if it is to measure up to its responsibilities, must keep abreast of changing conditions. With the growing tendency toward mergers in all parts of the country, the accounting profession must, of necessity, adjust itself to meet this economic condition.A study has been inaugurated looking into the matter of the facility with which accountants may carry on an interstate practice. It is my belief that when regulatory measures are adopted by the states, it should not be made too difficult for an ac­countant to pass into another state to complete an engagement originating in the state where he maintains his principal office. Investigations of a similar character are being conducted by other organizations and it is hoped that from these studies there will be evolved a plan of procedure which will be of value to all.The president is deeply appreciative of the work which has been done by members of committees and others who have been 242American Institute of Accountantscalled upon to perform service and have functioned in a manner creditable to our profession. It is true, however, that too few of our members are willing to make the sacrifice of time necessary if the Institute is to accomplish adequately all the things it has before it. There should be a greater sense of obligation on the part of a larger number of our members to committee responsibil­ity. The direct benefits to members may not be proportionate to the amount of labor expended, but the satisfaction derived by any member willing to devote the time to working out something which will be of benefit to the entire accounting profession can not be measured. Much time and thought is given to committee ap­pointments and there are few committees which could not perform a useful service if the membership of those committees appreciated the opportunity for service. Too often we are too impressed with our own personal obligations to devote the time required in strengthening the profession generally. It is the sincere hope of your president that a great number of members who heretofore have been inactive will indicate a desire to share some of the re­sponsibilities and burdens which are now being carried by a few members who do appreciate what they owe to their profession. Unless many more of our members who have had large experience are willing to devote time to matters affecting the profession, we can not hope to do all that seems necessary if the Institute is to keep up with the problems which are arising daily and are of vital interest to the profession throughout the country.Some of you may have read the article, “Honor among law­yers,” which appeared in a recent issue of the Outlook. This article attempts to analyze the legal profession, and when we find a statement such as“We find ourselves today with a profession filled with incompetents, with liars and jury bribers and peddlers of perjured testimony. We find ourselves served by attorneys of no greater cultural attainments than the butcher’s boy around the corner and not half his native honesty. We find ourselves responsible to judges who have nothing to recommend them ex­cept unsavory political backing and a few years of cheap practice.”it behooves us to stop, look and listen to determine just what progress the accounting profession has made and in what direction it is going.Some of the reasons given in this article for the condition which is said to exist in the legal profession are:1. The overcrowding of the bar.2. The lack of proper educational requirements in the face of the modern complexity of the law.243The Journal of Accountancy3. The absence of an efficient disciplinary control.4. The evolution of the legal profession into a trade.These are all reasons about which we might very well ask our­selves, do they exist in the accounting profession and, if so, what are we doing to counteract them. We may not have any over­crowding at the present time, but when one considers the rate at which the accounting schools are turning out students, it seems probable that we too, in the not distant future, will have an over­crowded condition. I have been told that there are at present 45,000 students enrolled in accounting schools in this country. Are we, as an organized body of accountants, doing all that we should do to encourage proper educational requirements? Are we too soft in our disciplinary methods? Should we proceed more vigorously in the prosecution of cases which appear to in­volve a violation of our rules of professional conduct? Is each of us afraid that some day he may make the same error, and are we inclined, therefore, to be tender with the violators of these rules? Are we reaching toward higher and higher standards of profes­sional practice or are we, in the scramble to attain larger and more lucrative practices, veering away from those principles which seem to lie at the foundation of our profession and bending more toward those policies which seem to be peculiarly related to trade?The president does not wish to appear to be unduly pessimistic but he is fearful that we may settle back into a state of smugness, closing our eyes to the economic changes which are taking place, when we should be ever striving for that state of perfection which we may never hope to attain but can only expect to ap­proximate by untiring efforts and the wholehearted cooperation of the entire membership. The president is convinced that there is much work to be done. He is also convinced that much work will remain to be done, unless there is developed a greater spirit of service on the part of a larger number of members than is ap­parent at present.The Institute, through its members, took an active part in the work of preparation for the international congress on accounting, successfully carried to completion in New York last week. Such a meeting and exchange of ideas must be productive of good to the profession.Sincere appreciation is expressed to all those who have helped carry on during the past year; to the secretary and his staff; to 244American Institute of Accountantsthose members who have responded to every demand I have placed upon them. Whatever I may have said to the contrary has been said in the hope of inspiring more members to their responsibility to the profession which they have selected for their own.245

American Institute of Accountants: Report of the President

Journal of Accountancy Volume 50 Issue 5 Article 2 11-1930 American Institute of Accountants: Report of the President Frederick H. Hurdman Follow this and additional works at: https://egrove.olemiss.edu/jofa  Part of the Accounting Commons Recommended Citation Hurdman, Frederick H. (1930) "American Institute of Accountants: Report of the President," Journal of Accountancy: Vol. 50 : Iss. 5 , Article 2. Available at: https://egrove.olemiss.edu/jofa/vol50/iss5/2 This Article is brought to you for free and open access by the Archival Digital Accounting Collection at eGrove. It has been accepted for inclusion in Journal of Accountancy by an authorized editor of eGrove. For more information, please contact egrove@olemiss.edu. American Institute of AccountantsREPORT OF THE PRESIDENT ** Delivered at the annual meeting of the American Institute of Accountants, Colorado Springs, Colorado, September 16, 1930.By Frederick H. HurdmanOne year ago, at Washington, you accepted the invitation of Colorado Springs to hold your next annual meeting in this alto­gether delightful spot. It seems that your choice has been a happy one and even those of you who have come a long way I am sure will feel no regret.In this the second year of office as your president it is my opinion that there have been many important developments. You will find in other reports a complete review of the year’s activities. I shall mention a few only.During the past year many parts of this country have been visited by your president and secretary. It is believed that these trips are of great value in creating a better understanding of what the Institute means to the profession. Last December it was my privilege to attend at Montreal the fiftieth anniversary celebration of the founding of the Institute of Chartered Accountants in Quebec. Your president and editor represented the Institute in London, England, last May at the fiftieth anniversary of the granting of the charter to the Institute of Chartered Accountants in England and Wales. At the same time we were entertained by the Society of Incorporated Accountants and Auditors. On that occasion many of the friendships made when our cousins from overseas visited us in Washington a year ago were renewed and strengthened. Early this month I attended the annual meeting of the Dominion Association of Chartered Accountants at Halifax.The arrangement effected during the year whereby The Cen­tury Company will publish and distribute books on accounting selected and edited by the Institute should add greatly to its prestige and improve the quality of accounting literature pro­duced in the future. Your officers are not so much concerned with profits to be derived from this venture as they are in pro­ducing books by capable authors on subjects on which there appears to be a lack of good material at present.330American Institute of AccountantsAs a result of this undertaking it seemed wise to make a change in the personnel in order that A. P. Richardson, who had for so many years very ably filled the position of secretary and editor, could devote all his time to editorial work. Accordingly, as of January 1, 1930, Mr. Richardson has occupied the position of editor and Mr. Carey has served as secretary. Under this arrange­ment I believe the Institute has two extremely capable officers serving in positions for which each is well suited.From time to time the Institute has been asked to express an opinion on questions of accounting procedure. Many of these questions were disposed of through the work of special committees created for the purpose, but it has been felt that the Institute should have a special or standing committee on accounting pro­cedure which might consider problems of procedure arising from time to time in our practice and make some pronouncement which would have weight. With the approval of the executive com­mittee such a committee was appointed during the past year, its membership being composed of representatives of the larger firms with offices in New York, in order that we might have the benefit of the larger experience of those firms and have it quickly. A matter of importance is now before that committee, viz., the question of the treatment of periodic stock dividends.A special committee on bankruptcy reform has been appointed to assist the authorities in Washington in the investigation of the operation of the bankruptcy laws ordered by President Hoover, who has indicated his appreciation of our offer of assistance. It is hoped, as a result of these efforts, that the accounting pro­fession may be accorded greater recognition in the future adminis­tration of these bankruptcy laws.During the past year the Institute has lost many men who had rendered outstanding service. Two in particular should be men­tioned: Waldron H. Rand, a past president and long a member of the board of examiners, and the other, Lewis G. Fisher, former vice-president and a member of the executive committee and chairman of the committee on state legislation at the time of his death. These men rarely missed a meeting of the Institute and unhesitatingly answered any call to service.There appears to be developing throughout the country, espe­cially among the younger accountants, a deeper appreciation of what the Institute represents to the accounting profession. This is evidenced by an increased number of applications for member­331The Journal of Accountancyship, by the interest expressed on the occasions when your officers have visited various parts of the country and by the letters re­ceived from time to time. This is, of course, as it should be if those guiding the policies of the Institute will ever keep foremost in their minds what is best for the profession as a whole and interest themselves in every worth while development affecting accountancy.By the very nature of things most of the undertakings of the Institute will have to be effected through the voluntary coopera­tion of its members. I have been deeply gratified by the spirit of cooperation evidenced on the part of all to whom I have issued the call to service. To as great an extent as possible I have tried to enlist the services of the younger men, believing as I do that only by such enlistment can we hope to keep alive the spirit of the Institute handed down to us by those older practitioners who have given so much in the development of our profession.I have been much interested in a recent study which devel­oped the fact that in addition to past presidents the council now has in its membership only four men who were on the council when the Institute was formed fourteen years ago, and only two of those have served with slight interruption. The executive com­mittee, as now constituted, has only two members who held any official position in the Institute as far back as 1916.Another interesting fact is that in the membership roll of the Institute at the present time there are more than nine hundred firms of individual practitioners represented. I do not know how many individual firms are engaged in practice in the United States but I venture to say the Institute numbers a goodly per­centage of the total in its membership.These facts are mentioned not in a spirit of boasting but to indicate a reason perhaps for the increasing appreciation of what the Institute stands for and what it is trying to accomplish for the profession.Important economic changes are taking place in the business world, and the accounting profession, because of its close relation to business, finds itself very much affected by these changes. I have felt very strongly during the past year that if we are to cope with the problems constantly arising and maintain the position we have gained for ourselves in the public esteem, we must maintain the high standards of ethics and practice developed over the past years.332American Institute of AccountantsEvery effort should be made to extend the influence of the Institute by so conducting its affairs that every reputable practi­tioner will feel that he needs membership in order that his status in the community where he practises may be fixed. To accom­plish this purpose the Institute should have the active coopera­tion of all its members so that its influence may be felt in every worth while movement. Its membership must so conduct itself that it will ever retain the respect of those interests we serve. I am more strongly of the opinion than ever before that we need just such an organization as The American Institute of Ac­countants.Let me take this occasion to thank you who have honored me in this high office during the past two years, those members of committees who have worked so faithfully during the past year, members of the council who have, at much sacrifice of time and money, attended its sessions and to the staff in New York who have performed their duties efficiently and loyally.333

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American Institute of Accountants: Report of the President

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