Journal Article Period and Velocity as Statistical Concepts Get access K. A. Gordon K. A. Gordon University of California, Berkeley Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 55, Issue 2, February 1941, Pages 306–313, https://doi.org/10.2307/1882064 Published: 01 February 1941
Time and again the prosperity malpractices of corporate management were the subjects of erudite discussions. Moreover, the courts have always had a tendency toward setting up rules of law which they felt would protect the small absentee owner. Perhaps this depression philosophy may be said to be accountable for the desire to limit the capital raising activities of those large corporate entities in future prosperity periods, who had demonstrated themselves to be given to faulty procedures during the prosperity era of the twenties. But it must be emphasized that there was a trend toward such financial regulations even during the preceding prosperity period. Furthermore, during this period there were evidences indicating that the accountants responsibility would likewise expand and increase under this financial control philosophy. Perhaps the first forecast of accountants' increasing responsibility was the Ultra Mares case which began early in 1924. After 1922, however, corporate management turned to selling securities in order to secure the capital needed.
Since the Tentative Statement of Accounting Principles was published in 1936, a considerable critical and explanatory literature has developed on the general subject. No doubt the time will come when this discussion will inspire a reexamination and perhaps a revision of the original statement. With this in mind, the article reviews the Tentative Statement. Several general conclusions may be drawn from an examination of the published criticisms of the Tentative Statement. First, several of the propositions are considered by the critics as being applications of principles rather than principles in themselves. Second, the critics seem to offer no objection to the inclusion of what are essentially definitions and rules. Third, the implication is made that the Statement would have been better constructed, not as a series of equally important propositions, but as principles and corollaries. Fourth, some of the propositions, although challenged, are left in rather an uncertain state because the critics disagree as to whether there is sufficient reason to reject them. Fifth, the wording in many cases has been described as vague, ambiguous, and inconsistent proposals are made for new and additional principles not included in the Tentative Statement.