To begin, the profession has disseminated the message far and wide that its members are the high priests responsible for the interpretation and application of a very special body of knowledge known as "generally accepted accounting principles" usually referred to as "GAAP." On analysis one quickly discerns that no such defined body of principles exists. Some commentators maintain, in fact,that not a single accounting precept is deserving of the designation"principle" and these exegetics urge that the critical phrase be changed to read "generally accepted accounting standards," hence" GAAS." Others, reflecting on the evils perpetrated in the name of GAAP and/or GAAS by the conglomerates, franchisors, land developers, home builders, lessors of computers and other objets d'art, real estate investment trusts, banks and insurance companies, and oil companies, inter alia, prefer the designation "cleverly rigged accounting ploys," hence, "CRAP." Whether we refer to them as GAAP or GAAS or CRAP it is my view that the "rules" could produce a fair communication to those entitled to know. As this essay will make clear, however, the difficulty arises because the principles are applied in an unprincipled manner.
Abraham J. Brilof,
We Often Paint Fakes,
28 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol28/iss1/5