Reviewed by Martin Benis Bernard M. Baruch College City University of New York

Anyone who wishes to trace the development of accounting theory since 1930 and the influence of the Securities and Exchange Commission (SEC) in this development must read the published speeches and articles of Andrew Barr. Barr was associated with the SEC from 1938, when he was hired as a research accountant, until he retired in 1972, except for military service during World War II. In 1947, he was appointed Assistant Chief Accountant and, in 1956, Chief Accountant, a position he held until his retirement. Thus, Andrew Barr was with the SEC almost from the beginning and always was directly involved in the development of accounting and reporting requirements of registered companies. This book presents speeches and articles of Barr from 1930 to 1979.

The kind of man Andrew Barr was is reflected in his writings. He was a candid, forthright individual, concise and direct in his speeches and articles. He was an accounting theoretician and practitioner with a sense of history. Most of his writings describe what was and what is and many of them tell what should be, He was aware of the necessity and importance of responsible corporate fi-nancial reporting to the effective functioning of the capital markets and of the critical role of the independent auditor in this reporting process.

Andrew Barr recognized earlier than most society’s demands on and expectations of the accounting profession. “With the wide-spread recognition of the importance of accounting in solving present-day problems of government and industry, practitioners and teachers of accounting have an unparalleled opportunity to make a constructive contribution. If we do not, the lawyers of the Securities and Exchange Commission and other Government agencies will do it for us.” Barr said this in 1938.

Andrew Barr was concerned with and involved in the development of accounting theory. His speeches and articles discuss the critical accounting problems of the time—investment tax credits, leases, pensions, income taxes, business combinations, and replacement costs. However, Barr was not one of narrow vision concerned with theory only. He was deeply concerned with broader accounting and auditing problems such as the following: (1) SEC cooperation with the accounting profession, (2) auditor independence, (3) auditor competence, (4) displacement of local practitioners when their clients go public, (5) investor protection, (6) ambiguous auditor reports, and (7) management services provided by the auditor.
In his speeches and articles, Barr acknowledges the importance of the accounting profession in the effective functioning of the capital markets and the commitment of the SEC to cooperation with the profession in the development of accounting theory. In a 1962 speech, Barr stated that “the professional accountant’s reputation for high standards of personal integrity is relied upon to protect the public investor. Basically it is the accountant’s conscience which affords the protection demanded by the securities acts.” In 1964, Barr, in discussing cooperation between the SEC and the profession, noted that “experience has borne out that the investor, and the public, are best served by this practice.”

Barr wanted accounting to change as the business environment changed. However, he wanted the change to be gradual. He was concerned always about the public’s confidence in published financial statements. Thus, in his comments on Accounting Research Study No. 3, he states that “the proposals might be tested during a conversion period by means of supplementary statements. However, indiscriminate application of the principles could result in false and misleading financial statements and might tend to undermine the confidence of the public in all financial statements.”

Barr was aware of the problem of local practitioner displacement when his client went public long before Metcalf and Moss. In his speeches and articles, Barr alerted the local practitioner to the demands of the SEC for competence and independence. He advised the local practitioner to anticipate his client going public, to maintain his independence, and to keep up to date with auditing and accounting pronouncements of the profession and the SEC. His commitment to cooperation with the profession extended to encouraging the practitioner to consult with the SEC. In 1963, he noted that “many , . . of the problems . . . and other difficulties of the first-time registrant may be avoided . . . by a pre-filing conference with the accounting staff of the Commission. The inexperienced practitioner should not hesitate to suggest this to his client.

In 1960, Barr acknowledged the broad scope of accounting ser-vices and recognized that the performance of some of these services might create irreconcilable conflicts. He noted that “systems work, cost analysis, budgetary controls and other aspects of business management have long been the province of the public accountants. It could be possible for an accountant to become so deeply involved in performing managerial services for a client that he would lose his objective approach to his audit engagement. In such a case he should concentrate on one activity or the other and not attempt to do both.” Andrew Barr was evangelical in his commitment to auditor independence and investor protection.

This collection presents fifty years of the work of a man deeply involved in the development of accounting theory and the evolution of government regulation. A project of this magnitude cannot be without flaw. The speeches and articles are presented in chronological order. It would have been better if they had been presented by subject matter, wherever possible. An appendix in the back of the book notes where an article was published or a speech presented. It would help the reader if this information was presented on the first page of each work. Finally, when a person is a public figure for fifty years, he repeats many of his thoughts and ideas. Some of this repetition could have been avoided by more thorough editing. However, these flaws are minor and are a small price to pay for having in one book fifty years of Andrew Barr.