On Jan. 22, 1996, Accounting Today published the first version of The Spirit of Accounting, titled "Self-regulation: Oxymoronic or just plain moronic?"

It was written by Paul Miller and Ed Ketz of Penn State's accounting faculty. The title pretty much set the tone not just for that column but the whole series. We would be unintimidated by authority and conventional wisdom as we identified, discussed and proposed solutions to issues of all kinds: technical, theoretical, ethical, behavioral and political. The current column is the 300th, and we're going to present our individual perspectives on this milestone.



I can't say I expected this engagement to run so long. I suppose if someone had said I would have to produce 300 drafts, I would never have written any. Instead, I've just looked at the task as getting the next one done. In the span of nearly 14 years, some things have changed, and others haven't. I want to look at what things were like then and now.

Then: I was professor of accounting at the University of Colorado at Colorado Springs, a school of about 3,500 students. Now:I still hold that position but UCCS now has 8,500 students. Plus, I am the founder and advisor to a PGA-accredited Golf Management Program, which is much more fun than accounting.

Then: I had been married 26 years and had three kids. Now:I have been married for 40 years and have three kids, two daughters-in-law, and 4.5 grandchildren. This is also more fun than accounting.

Then: I was 39 years old. Now:I am 39 years old.

Then: My golf handicap was about a 20. Now:It's more like a 9. (You don't think I sit around writing columns all the time, do you?)

Then: I dreamed of playing the Old Course at St. Andrews. Now: I've played it twice so far, and I'm dreaming of the third.

Then: I held firm to the model that only accounting standard-setters can initiate reform through coercion of management and auditors.Now: I am irrevocably convinced that standards can at best establish only minimum levels of quality, but that managers and auditors could choose to go higher. All they need to do is grasp the economic advantages of serving users' needs, instead of nursing the notion that they're better off when users don't understand what's going on. Some of you may recall that Paul and I call this concept "Quality Financial Reporting," or QFR.

Then: I was a fervent supporter of independent standard-setting as embodied by the Financial Accounting Standards Board under the Securities and Exchange Commission's protection. Now: I feel the same way and even more fervently because the board is now almost truly independent thanks to Sarbanes-Oxley and the SEC's steadfast loyalty. This would be a bad time to surrender that independence to the International Accounting Standards Board, I am sure.

Then: I was a fervent critic of FASB for not raising the bar as high as it could and should. Now: I am a fervent critic of FASB for not raising the bar as high as it could and should.

Then: I was unclear as to whether cost-based numbers might be useful in financial reporting. Now: I am totally convinced that cost-based numbers cannot be useful for supporting rational decision-making unless they somehow approximate market value.

Then: I believed the status quo of financial accounting practice needed some modification. Now:I see relatively little in the status quo that is worth preserving. Rather, wholesale reform is essential if reporting is to fulfill its social mandate to make capital markets more efficient.

Then: I genuinely loved the younger generation of accounting students and the hope they offered for the profession's future. Now:I feel the same way, but I am repeatedly broken-hearted as I see local and national leaders crush that hope and squelch their new employees' enthusiasm and vision by forcing them into the same straightjacketed thinking that they themselves were forced to embrace when they were young and optimistic. I long for a break in this destructive cycle.

Then: I was an eternal optimist. Now:As I grow older, but not yet old, I realize I am a mortal but persistent optimist.

Then: I had a close friend in Paul Bahnson. Now:I have an even closer friend and colleague in Paul Bahnson.

Then: I was committed to delivering messages that can change the world, if only one person at a time. Now:I feel the same, but I am growing impatient.

Then: If I had considered it, I would have thought 300 columns would have been enough. Now:I know 300 isn't enough.

Then: I was hopeful that anyone would read the column. Now:I am overwhelmed with gratitude that it is read so faithfully by so many, even those who are convinced we are crackpots.

Now: For sure, I cannot thank everyone enough, starting with Ed Ketz and former Accounting Today editor Rick Telberg, and continuing with Bill Carlino and Dan Hood at the magazine and all our readers and especially my good friend Paul Bahnson. And our families most of all.

I never put my fingers to the keyboard without taking a moment to first thank you before I create words to serve you, even if it means jarring your sensibilities and upsetting your comfortable way of looking at things. Be assured that I mean no harm, but I do aim to foment change and improvement. Thanks for the privilege of serving you for so long through this medium. There is no end in sight, by the way. I am, after all, only 39 and still going strong.



I find it almost incomprehensible to reflect on the fact that Paul Miller and I have written 200 columns together for Accounting Today over the past nine years. Had achieving such a long string been a requirement back on that early summer day in 2000 when Paul asked me to join him in this endeavor, I most assuredly would have said no. I had some misgivings at the time as to whether I was up to the task, even without any added pressure of keeping at it for so long.

You see, I had been a loyal reader of The Spirit of Accounting from the outset, and I wondered if I would be able to keep the writing and analysis up to the same level where it had been under Paul and Ed. I won't try to answer whether I've kept up my part; that's better left to Paul and to you, our readers.

What I can say is that I have certainly enjoyed contributing to this effort with my very good friend. I have known him for a long time, going way back to my Ph.D program at the University of Utah in the early 1980s (when he really was 39). When I first met him and heard him speak, I recognized a kindred spirit whose concerns about the sorry state of reporting, and the profession in general, gave voice to my own feelings. In the years since, I have learned so much from him and we have become even better friends. Were it not so, I doubt that our collaboration would have continued for so long. Suffice to say that we spend lots of time on the phone and exchanging e-mails. Paul's insight, enthusiasm, patience and humor have been keys to making this long-running collaboration both productive and enjoyable. For that I say, thanks Paul.



So much has changed during the past nine years. We've survived two major shocks to our economic system. First was the wave of scandals that shook our profession to the core as we all watched the implosions of Enron, WorldCom and the rest. These events vindicated many of the concerns we had expressed in the column about financial reporting and the auditing profession. While some improvements were instituted in response, we find no shortage of issues that still need to be addressed.

The second disruption was the more recent financial collapse of 2008. While its root cause wasn't accounting and auditing, per se, there was still some culpability, but not due to mark-to-market. Notably, I'm sure that more transparent reporting would have revealed the extreme risk concentrations earlier with positive effect. In fact, we think better reporting would have kept some of the underlying problems from happening in the first place. This view is based on one of our QFR-inspired mantras: 'You manage what you measure,' which has this corollary: 'You don't manage what you don't measure.' We are confident that requiring managers to report useful financial numbers for their investment and financing activities would have made them think twice and otherwise curtailed their irrational risk-taking.

On another front, it was interesting to watch those who attempt to make fair value reporting the scapegoat for the cataclysm. This explanation simply isn't valid, but many well-known pundits and commentators eagerly jumped on that bandwagon. It seems like that cacophony is winding down, but it's being replaced by the growing din associated with the drive for international convergence. I expect you will be hearing more from us on that issue going forward.

As a final point, I'd like to thank those who have taken time to write to us over the years and share their thoughts. While we have heard from a number of folks a single time, a few have engaged us in longer and deeper conversations. In particular I'd like to recognize Al King, Newt Rumble and Arthur Hendricks. Their comments have not always been pats on the back, but they nevertheless help us better understand the issues and sharpen our focus in what we write.


Paul B. W. Miller is a professor at the University of Colorado at Colorado Springs and Paul R. Bahnson is a professor at Boise State University. The authorsring managers to report useful financial numbers for their investment and financing activiti

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