Response to “In the Public Interest"

This post is my personal response to the article “In the Public Interest” by Harvey Kapnick taken from Accounting and Financial Reporting published by Arther Anderson, Chicago 1974.

Who else, but Kapnick can we look at today and say, "Now there's a guy who had it right!" Reading this article makes it so much more depressing to live in a world where Arther Anderson no longer exists. Knowing that Kapnick was forced to step down due to his opposition to Anderson's expanding role as consultants makes me beyond depressed. I shouldn't linger here, because I know moments before his death, Kapnick was validated.

I am impressed with his vision, his outrage and the level of compassion he brought to his view of the profession. When he speaks of a global economy, he is careful to state that all people in this economy should be represented fairly. He admits that a full time, compensated standards setting board is important, but remembers that practitioners should have an active role and encourages a place in standard setting for academics. This vision would have provided the profession with a level of effectiveness and respect that we sadly lack.

Further, I am impressed with Kapnick's lament over the decreased position of the balance sheet. This common sense approach to financial reporting is lost today. We have built an elaborate system of valuation that hides the information we are supposed to be presenting in order to maximize profit on paper. Warren Buffet made his billions with a balance sheet approach to investing and has stated again and again that this is the only way to really know where to invest. In fact, Buffet's wild success would not have been possible if not for the fact that the rest of the investing world was focused on the other, dysfunctional approach.

Now I just have to find out how to live out Kapnick's approach.