Adopting Professor Henry Rand Hatfield's broad statement of the function of accounting, the possible objectives of accounting research are almost unlimited. Professor Hatfield once stated that the function of accounting is "to place responsibility, to prevent fraud, to guide industry, to determine equities, to solve the all essential conundrum of business. In order to perform this function adequately it is essential for accountants to take full cognizance of the outstanding characteristics of modern business life, to develop and to use effectively available tools of analysis and to recognize in all respects their social responsibilities. The author in this papers confines himself to a series of observations regarding the weakness of present-day accountancy, which will readily bring to mind certain desirable objectives to be attained through accounting research. According to the author, with accountants becoming business advisers, exponents of good financial practice, and fiscal agents of stockholders, the objectives which he had suggested to be attained through accounting research, in view of certain shortcomings of present-day accountancy, may even be too narrow rather than too broad.

No one knows precisely what portion of the income-streams of corporations goes to the "insiders." Insiders are the executive head of a business firm. He is typically on the board of directors and is acquainted first-hand with practically all the policies, the future plans and past operations of the business unit in question. Practically always bankers and very often the members of professional firms, such as, management, legal, accounting or engineering concerns might be considered "insiders." The indicated income-stream of a given business firm over short periods of time can be changed radically by the "insiders." And these changes can be so made that over a long period of time the income-streams to the "insiders" will be enhanced over what they would otherwise be. They can manipulate the accounting practices of the business unit, thereby affecting the amount that will be considered as the profit-share during any given period of time. The manipulation of accounts-takes the form usually of tampering with the valuation of assets and liabilities.