Book review: Accounting Changes: Chronicles of Convergence, Crisis and Complexity in Financial Reporting

Let’s plug a book!

Faithful followers of Insights will note that I have never had an original idea in my life, but there is not much of merit that I have stumbled across that I have not put to good use. Most of these good ideas come from listening, observing and reading.

So it is among the more recent of the many historical, military and business books I have read.

This book, in particular, was written by my old friend and former Coopers & Lybrand partner, Bob Herz. Bob is among the more noted accountants of the past 30 years. He served as the lead technical partner at Coopers, reporting to me when I led the audit practice from 1993 to 1998. After retiring from the merged PricewaterhouseCoopers firm where he lasted a lot longer than I did, he went on to chair the Financial Accounting Standards Board.

To non accountants, this may be an eye roller, but to those involved in the accounting changes that have occurred since the mid ‘90s, Bob is respected as the premier thought leader of the period.

Well, he has written a book of those experiences entitled Accounting Changes: Chronicles of Convergence, Crisis and Complexity in Financial Reporting. While it is never going to make the best seller list, it is a must read for those who wish to understand the process by which accounting principles are developed and the challenges faced by the profession in addressing issues of the past few years, most notably stock options, fair value accounting and the convergence of GAAP and the International Financial Reporting Standards, among others. Also covered is the role played, or rather not played, by accounting standards in the financial meltdown of 2008 and 2009 and the more notable audit failures we have experienced.

Be warned though, this is not always an easy read. Other than the chapter where Bob says nice things about me and the team I was honored to lead in turning around the audit practice at Coopers in the mid ‘90s, this book can be a tough go. Another good friend and leader on that team, Barry Winograd, often accused Bob of writing accounting rules than only he could understand; now he’s written a book that only he can understand.

That may be a bit of a stretch, but not by much. I do encourage those wishing to understand an era and the man who saw it, to persevere. It is well worth the effort.

Bob’s book can be ordered through the Lake Forest Book Store in Lake Forest Il. If you are reading this, you are in my website and can find the link. You can also order more copies of my book while you are at it. The owner is a good friend and needs the business far more than does Amazon.

As always, I would be interested in your views. Email me at pat@themcdonnellcompany.com.

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