George Davis Bailey first executive partner of Touche, Niven, Bailey, and Smart (a predecessor firm to Deloitte Touche Tohmatsu).

Grayson, Michael M.

BIOGRAPHICAL DATA

George D. Bailey was born in Sioux City, Iowa on June 6, 1890 to Henry Moore Bailey and Mary Louise Davis Bailey. (Accounting Hall of Fame; Burns and Coffman, 1976) His family were originally from New England, his father having attended the Sheffield Scientific School at Yale, and his mother Mt. Holyoke College. (The History Factory) He graduated from Sioux City High School in 1908. (Accounting Hall of Fame) He entered the University of Wisconsin intending to study engineering, but changed to accounting. (The History Factory)

In 1912, he graduated with a bachelor's degree from the University of Wisconsin, and joined Ernst & Ernst in Cleveland. He became a partner in 1916 and moved to Detroit. He also married in 1916. (Accounting Hall of Fame) In 1917 he first became a CPA, in Wisconsin. (Accounting Hall of Fame) In 1922 he became the managing partner of the Detroit office of Ernst & Ernst. (The History Factory)

In 1947, while he was one of the senior partners of Ernst & Ernst and still in charge of the Detroit office (Carey 1970, p. 65), he left the firm, taking the Chrysler audit and other work with him, one Ernst partner, and eleven staff people, and started his own firm, George Bailey & Company. (Accounting Hall of Fame, Deloitte & Touche, and The History Factory) However, he did not have sufficient staff to do the work (The History Factory), so on September 1 of that same year he combined with two other firms (Touche, Niven & Co., founded in 1900, and Allen R. Smart & Co., founded in 1927) to form Touche, Niven, Bailey & Smart, serving as chairman of the first management committee of three senior partners. (The History Factory) The combined firm had ten offices in ten cities, with thirty-three partners. (The History Factory) He was an executive partner of the firm until his retirement in 1957. (Accounting Hall of Fame)

The firm forged ties with the Canadian firm of Ross, Touche and the British firm of George A. Touche. In 1960, the firm was renamed Touche, Ross, Bailey & Smart. On September 1, 1969, the name was simplified to Touche Ross & Co. (Deloitte & Touche and The History Factory) The firm is now part of Deloitte Touche Tohmatsu.

LIFE SUMMARY BY OTHERS

George Bailey was chairman for two years of the nominating committee for the Accounting Hall of Fame (Journal of Accountancy, March 1958, p. 8). He was elected posthumously to membership in 1968. According to a biographical sketch obtained from the Accounting Hall of Fame,

 He was active in numerous government, civic, and community
 organizations, particularly with the affairs of Michigan and the
 city of Detroit. He worked extensively with the federal government,
 largely as an unpaid advisor and consultant. Early in World War II,
 he participated in the formation of accounting and tax decisions in
 the War Department. He was consultant to the Office of Contract
 Settlement (1944-45), the Board of Governors of the Federal Reserve
 System (1955-56, during its study of consumer credit regulations),
 and the Statistical Division of the United Nations Secretariat
 (1958-59). He was president, Michigan Council for Tax Research;
 trustee, citizens' Research Council of Michigan, and in Detroit he
 was president, United Community Services (1946-48); director, Board
 of Commerce (1945-58); and trustee, Grace Hospital, and Visiting
 Nurse Association. He was active in the formation of the United
 Foundation, the first organization to unite fundraising for
 national and local charities.

 He married Edna Gillen in 1916; he later married Fern Crawford in
 1962. There were no children by either marriage. An active clubman,
 he enjoyed fishing, golf, travel, and the Detroit Symphony
 Orchestra. He collected old English dictionaries and owl figurines.
 He died December 2, 1966 at the age of 76.

SIGNIFICANT POSITIONS WITHIN THE PROFESSION

He was active in professional organizations, serving on twenty-three committees of the organization now known as the American Institute of Certified Public Accountants. Among those committees were the Trial Board, Committee on Terminology, Committee on Relations with the Bar (Accounting Hall of Fame), and Committee on Cooperation with SEC (American Institute of Accountants 1947, p. 123). He was vice president of the American Accounting Association in 1942, vice president of the American Institute of Accountants (now the American Institute of Certified Public Accountants) 1943-1944, member of the Committee on Accounting Procedure 1938-1947 and its chairman from 1944-1947, and president of the American Institute of Accountants 1947-1948 (Accounting Hall of Fame).

During the time George Bailey was chairman of the Committee on Accounting Procedure, the committee issued seven bulletins (American Institute of Accountants 1948, p. 124):

No. 25 Accounting for Terminated War Contracts
No. 26 Accounting for the Use of Special War Reserves
No. 27 Emergency Facilities
No. 28 Accounting Treatment of General Purpose Contingency
 Reserves
No. 29 Inventory Pricing
No. 30 Current Assets and Current Liabilities--Working Capital
No. 31 Inventory Reserves

WRITINGS ATTRIBUTED TO GEORGE D. BAILEY

An examination of the entries in the Accountants Index shows that most of the writings were actually speeches being printed in house organs of various institutions, or disclosure by a committee member or chairman of the work of the committee. A scan of speech manuscripts shows editing done by more than one person, which suggests that George Bailey did not write those items himself, but rather put his name on what was produced by others. Another document, Consumer Instalment (sic) Credit, Part III, Views on Regulation, claims to be a survey done by George D. Bailey. Considering that, per page 4 of the book, there were 787 replies, and that he was close to retirement, it is obvious that the study was actually done by staff people in his firm, though possibly operating under his general direction. The Journal of Accountancy of March 1958 stated that he was directing the study (page 8).

POSITIONS HELD BY BAILEY ON ACCOUNTING MATTERS

Accounting Research Bulletin Number 8 had been in favor of an all-inclusive concept of reporting net income. With an all-inclusive concept, net income leaves a historical record of all the earnings and losses of a company, whether asserted to be from ordinary operations or from one-time events. An opposing viewpoint, the current operating performance concept, included in net income only those items allegedly occurring year in and year out. Thus, expenses not recorded in prior periods, losses on sales of fixed assets, and uninsured losses could all be recorded as direct charges to retained earnings rather than as charges against the income statement. Proponents of the current operating performance concept referred to it as "sharpening net income."

"George D. Bailey ... was a strong advocate of 'sharpening net income.' ... He believed that net income should reflect earning capacity--earnings from the regular business of a company, exclusive of windfalls such as gains on the sale of a plant--and should be determined in a way that would permit comparison of results of one year with those of another, and the results of one corporation with those of others...." (Carey 1970, pp. 65-66) Earle King, who had succeeded William Werntz as chief accountant of the SEC when Werntz had resigned to join Touche, Niven, Bailey & Smart, argued that the procedures "seem to be susceptible to abuse...." (Carey 1970, p. 66) As a result, "the Commission authorized the staff to take exception to financial statements which appeared to be misleading," even though they might be in accordance with Bailey's view which was the one adopted in Accounting Research Bulletin No. 32. (Carey 1970, p. 66)

"In 1950, the SEC circulated for comment a draft of a proposed amendment to its Regulation S-X," with a portion of the amendment being in direct conflict with Accounting Research Bulletin No. 32. Although indignation was expressed by the accountants, they reached a compromise by agreeing that any special items excluded from the period's determination of net income would nevertheless be shown on the income statement under the line item captioned Net Income, added or subtracted as appropriate, and producing a line item to be captioned Net Income and Special Items. (Carey 1970, p. 67)

In the inflationary period following World War II, George O. May emerged as one of the proponents of reporting price-level depreciation rather than depreciation as computed on historical cost. George Bailey "emerged as one of the leaders" of those in favor of depreciation as computed on historical cost, a position in which he concurred with the thinking of the SEC. (Carey 1970, p. 68) However, neither side was able to convince the other, so in 1947, the Institute put up $30,000 and obtained a matching grant from the Rockefeller Foundation to sponsor a study of business income. Forty to fifty people took part in the deliberations, which took place over approximately a five-year period. The major thrust of the report advocated price-level accounting, but Earle C. King, George Bailey, Carman Blough, William Werntz, Edward Wilcox, and Charles Smith were among the dissenters (Carey 1970, pp. 68-69).

It is interesting that Carey depicted Bailey as favoring historical cost. In "Concepts of Income," (Harvard Business Review, Volume 26, November 1948, page 691), which was listed as being written by Bailey, there is this statement.

 ... the suggestions so far being made deal mostly with adjustments
 of cost through index figures rather than through consideration of
 all the other matters that influence fair value. But it seems to me
 almost necessary that any change of concept on earnings carry
 forward into the balance sheet.... Its use would show clearly the
 replacement problems for industry; there would be generally
 acceptable index figures for use; and there could be changes from
 year to year if there continue to be violent fluctuations in our
 economy. Earnings, for instance, could then be stated in percentage
 of return on investment at current values and not on old book
 values which mean little."

Carey started at the Institute in 1925 (Journal of Accountancy, June 1968, p. 31), and retired in May 1969 as executive director of the AICPA (Carey 1970, p. 272). His book includes a photograph of six people attending the American Institute of Accountants' speakers party, 1944 Wartime Accounting Conferences. In the photograph, Carey is standing directly behind a seated George D. Bailey (Carey 1970, p. 275). Carey was managing editor of Journal of Accountancy while Bailey was president of the Institute. The two men must have known each other. The above passage seems clear in its intent to base depreciation on price-level-adjusted figures rather than historical cost. Thus, either Carey is wrong about Bailey's position, or Bailey did not write his own speeches.

In three speeches in 1948, Bailey variously advocated historical cost only (see comments in Appendix B, 1948, Depreciation and inventory reserves), depreciation based on general-price-level-adjusted statements (see the above quote), and historical cost but potentially with current replacement cost given as supplemental disclosure (see comments in Appendix B, 1948, Management of reserves for inventories and depreciation). Accordingly, it appears that either Bailey was terribly inconsistent or that someone else wrote Bailey's speeches, including the material which was given as the Dickinson lecture and published in two parts in Harvard Business Review under his name. A scan of available manuscripts of Bailey's speeches indicates at least three different persons' handwriting.

Just to make matters more confusing, William A. Paton described a presentation in 1948 when the two of them made presentations to the Joint Committee on the Economic Report. Paton is quoted as saying, "... we managed to make vigorous and sophisticated pleas for putting the depreciation deduction on a current-dollar basis...." (Touche, Ross, Bailey & Smart, 1967, p. 13) Appendix B contains a listing of writings attributed to Bailey, together with selected annotations concerning subject matter and views expressed therein. As explained immediately preceding, some of the materials contradict each other.

THE BAILEY COMMISSION

In 1951, Donald P. Perry "delivered an address at the annual meeting of the Institute in which he described the great variety among the states in preliminary requirements for the CPA certificate." (Carey 1970, p. 264) Perry was named chairman of an independent 24-member Commission on Standards of Education and Experience for Certified Public Accountants. (Carey 1970, p. 265) The Commission's report, published in 1956, outlined the following characteristics of a profession (Carey 1970, pp. 265-266; the following list is quoted from page 266) in Table 1.

That part of the report was supported by general agreement, but another part considered the concept of the CPA certificate itself and what it should represent. The report envisioned the elimination of the experience requirement, "and that the CPA certificate be regarded as a mark of competence to enter the profession--rather than as a mark of competence to practice as a principal." (Carey 1970, p. 267) Some of the Commission members dissented violently, mainly to elimination of the experience requirement and to this view of the CPA certificate. (Carey 1970, p. 268)

George Bailey was appointed chairman of a special committee to determine the extent to which the Institute should adopt the recommendations of the Commission on Standards. The special committee, which became known as the Bailey committee, worked for nearly three years, surveyed the accounting profession and others, and recommended (among other things) "that the long-established meaning of the CPA certificate as evidence of demonstrated competence for the practice of public accounting be continued" and "that an experience requirement be retained." (Carey 1970, pp. 269-270) Another committee, the Hansen committee, was then formed to describe the nature of acceptable experience. (Carey 1970, p. 272)

INTERPRETATION OF DATA

My impression is that George Bailey was one of those people who does well in life by simply being likable, and who is eminently successful at obtaining credit for work done by others. He took firm employees and clients (including Chrysler) with him when he left Ernst & Ernst as managing partner of its Detroit office, was chairman of the Committee on Accounting Procedure, and was president of the American Institute of Accountants. With the resources of a large firm behind him, he was able to participate in activities in Detroit and Michigan which gave him and his firm publicity. He was also able to work at no charge for the federal government both during and after World War II, thereby gaining entry into situations which would produce goodwill and potential business for his firm; a small firm would not have had the resources to enable its owners or staff to do this without charge. Obviously, he was a rainmaker, one who brings in business.

Given the resources of a large firm, firm staff probably prepared speeches for him, which were then printed in various publications which listed him as the author. Information about what was decided by the government or by accounting committees were attributed to him, without credit given to other members of the committees. While some portion of the ideas contained in the writings may have been original, there is no way to ascertain which were his, which originated within his firm(s), and which originated with other people but for which George Bailey has been credited with authorship.

SUMMARY OF MAJOR WRITINGS

As a result of the research done for this paper, it appears that most of the writings attributed to Bailey are actually speeches which may have been written by others. In some cases, the written materials contradict each other. Nevertheless, certain themes stand out. First, accounting should be useful. Second, he was in favor of "sharpening net income," implying the current operating performance concept of net income.

I have not found any written record of disagreement with the concept that accounting should be useful. However, on the issue of which concept of net income to use, Henry T. Chamberlain, William A. Paton, and Maurice H. Stans, all of whom were members of the Committee on Accounting Procedure, objected to the issuance of ARB 32 "because they believe that the so-called 'all-inclusive' concept provides the proper measure of net income and best serves the public interest because it is least subject to reader misinterpretation." (ARB 32 as reprinted in Journal of Accountancy, January 1948, p. 24) As noted earlier in this paper, Earle C. King, chief accountant of the SEC, also objected.

PROCEDURES USED TO SEARCH FOR MATERIALS ON GEORGE D. BAILEY

I searched every copy of the Accountants Index and its successor, the Accounting & Tax Index, from the commencement of the index to 1994. For a fee plus air shipping cost, I obtained copies of all materials, other than Journal of Accountancy articles, available from the American Institute of Certified Public Accountants library. I obtained one government document from a library which is a full government depository.

I searched Dissertation Abstracts. Using the key word phrase "Bailey and accounting," I ascertained that no dissertations about George D. Bailey appeared in the data base through 2006. I contacted Dan Jensen of the Accounting Hall of Fame, who informed me that the Accounting Hall of Fame had very little information about George Bailey. Dan Jensen faxed me what information they did have at the Accounting Hall of Fame.

I contacted the headquarters of Deloitte & Touche (as it was then known) in Wilton, Connecticut, and Ellen Hegarty of that firm was kind enough to not only fax me what limited information she had available, but also to put me in touch with The History Factory in Washington, DC, which was working on a project for the firm. The History Factory faxed me the information they had available.

I searched the library shelves at Louisiana Tech University for all old material which might have mentioned George Bailey.

I read every written work attributed to George Bailey which I could find, including every article in Journal of Accountancy for which he was listed as author. I also read other materials which discussed Bailey or the positions he took. However, for the most part, the writings simply related what a group of people had been discussing or had decided.

TIME LINE

(Note: Chronology within years not guaranteed correct)

1890 June 6--born in Sioux City, Iowa to Henry Moore Bailey and Mary
 Louise Davis Bailey
1908 Graduated Sioux City High School
 Entered University of Wisconsin intending to study engineering,
 but changed to accounting
1912 Graduated University of Wisconsin with bachelor's degree; one
 of the first accounting majors in the U. S.
 Joined Ernst & Ernst in Cleveland
1916 Made partner in Ernst & Ernst
 Married Edna Gillen
 Moved to Detroit with Ernst & Ernst
1917 Became a CPA (Wisconsin)
1922 Became managing partner of Detroit office of Ernst & Ernst
 Joined organization which became the American Institute of
 Certified Public Accountants
1938 Became member of Committee on Accounting Procedure until 1947;
 chairman 1944-1947
1941 Became member of Executive Committee of American Institute of
 Accountants until 1944
1942 Became vice president of American Accounting Association
1943 Became vice president of American Institute of Accountants
 until 1944
1944 Became consultant to Office of Contract Settlement until 1945
1945 Became director, Board of Commerce in Detroit, 1945-1958
1946 Became president, United Community Services in Detroit,
 1946-1948
1947 Left Ernst & Ernst, taking Chrysler audit with him
 Set up own firm with one Ernst partner and eleven Ernst
 employees
 September 1--joined his firm with two others to form Touche,
 Niven, Bailey & Smart, the forerunner of the Touche Ross firm
 (now part of Deloitte & Touche); chairman of the first
 management committee of three senior partners (the other two
 were Jackson W. Smart, son of the deceased founder of the
 Smart firm, and Henry E. Mendes, who had been executive
 partner of Touche Niven)
 Became president of American Institute of Accountants, 1947-1948
 August 20, announcement of partnership of Touche, Niven, Bailey
 & Smart
1948 Dickinson Lecturer at Harvard
1952 Honorary member of University of Michigan chapter of Beta Alpha
 Psi
1955 Became consultant to Board of Governors of the Federal Reserve
 System during its study of consumer credit regulations,
 1955-1956
1957 Retired

1958 Received Michigan Association of CPAs' Service Award
 Became visiting professor at University of Michigan, 1958-1959
 Became consultant to Statistical Division of the United Nations
 Secretariat, 1958-1959
1959 Chairman of a special coordinating committee to study the
 report of the Commission on Standards of Education and
 Experience for CPAs
1960 Received AICPA's Gold Medal Award for Distinguished Service to
 the Profession
1961 Regents' Professor at University of California--Los Angeles,
 1961-1962
 National president of Phi Gamma Delta (college fraternity),
 1961-1962
1962 Married Fern Crawford
1966 Died December 2, age 76; survived by his wife, brother, and
 sister
1968 Elected to Accounting Hall of Fame posthumously

APPENDIX A

Listing of Writings Attributed to George D. Bailey

(Note: Chronology within years not guaranteed correct)

1938 Practical application of municipal accounting principles. In American Institute of Accountants Addresses presented at the conference on municipal accounting and finance, Chicago, March 28 and 29, pp. 13-18. Accountants' certificates. Fourteenth annual Michigan accounting conference, pp. 15-20, discussion pp. 20-21.

Introduction to round table discussion on: Accountants' certificates. In American Institute of Accountants Papers on accounting principles and procedures, pp. 75-77.

1939 Practical problems in governmental accounting. Accounting Review, Volume 14, Number 1, pp. 52-56.

Auditing procedure--a development to meet changing conditions. In Ohio State University Proceedings of the second annual institute on accounting.... May 19 and 20. pp. 63-75.

Testimony of the S.E.C. hearings on auditing practice and procedures at the Central states accounting conference, June 2, 1939; first section presented by George D. Bailey.

Adaptation of programs for independent audits to internal audit and control. Address before Michigan association of certified public accountants, December 14, 1939.

1940 Research work of the American Institute of Accountants. Address presented at the Southern states accountants' conference, New Orleans, La., April 26, 1940. Journal of Accountancy, July 1940, pp. 50-57.

Some thoughts on the theory of inventory pricing. In American Institute of Accountants, Experiences with extensions of auditing procedure, 1940, pp. 60-67.

1941 Problems of inventory pricing. Journal of Accountancy, August 1941, pp. 143-148. Reprinted from Central states accounting conference, Addresses delivered at Accounting clinic ... Stevens Hotel, Chicago, May 28-29, 1941, pp. 87-94.

Cost problems in national defense contracts. Robert Morris Associates monthly bulletin, October-November 1941, pp. 106-111.

1942 Accounting in war time. At a joint meeting of the Minnesota Society of Certified Public Accountants and the School of Business Administration of the University of Minnesota, held in Minneapolis, on April 28.

Practice of public accounting in wartime, Journal of Accountancy, July 1942, pp. 18-24.

Accounting problems in presentation of cost-plus-fixed-fee contracts in financial statements. In Michigan accounting conference, Technical papers of the seventeenth annual Michigan Accounting conference, 1942, pp. 23-27. Also in Journal of Accountancy, December 1942, pp. 503-510.

1943 Accounting problems of war contracts. California Certified Public Accountant, August 1943, pp. 2 and 6-13. Also in Journal of Accountancy, September 1943, pp. 211-219.

Government procedures--existing and proposed. In automotive council for war production. Proceedings of the contract termination conference, September 28, 1943, pp. 4-14.

Public accountant and war contract termination. In Michigan accounting conference, Technical papers of the eighteenth conference, November 1943, pp. 1-7.

Remarks of the chairman. In American Institute of Accountants, Audits under terminated war contracts, 1943, pp. 1-2 and 5-8.

War contract problems; remarks of the chairman. In American Institute of Accountants, Accounting problems in war contract termination, pp. 1-2.

United States Senate Committee on military affairs. Statement of George Bailey, chairman, contract termination committee, American Institute of Accountants. Journal of Accountancy, December 1943, pp. 526- 531.

1944 The public accountant and war contract termination. Journal of Accountancy, February 1944, pp. 106-108.

Termination of government contracts from the viewpoint of industry and the certified public accountant. New York Certified Public Accountant, Volume 14, May 1944, pp. 351-361.

The accountant and war contract termination. Printed elsewhere and in Journal of Accountancy, July 1944, pp. 36-41.

Cost phases of war contract termination, New York, National Association of Cost Accountants (now the Institute of Management Accountants), August 1, 1944. N.A.C.A. bulletin, Volume 25, Number 23, section 1, pp. 1235-1254.

Termination problems. (In Controllers Institute of America, Contract termination and industry reconversion: number 1 of annual meeting proceedings, pp. 10-20.) The Controllers Institute of America is now called the Financial Executives Institute.

1945 Significance of pronouncements on accounting procedure. (Remarks at meeting of committee on accounting procedure of American Institute of Accountants, held December 14, 1944.) Certified Public Accountant, volume 25, February 1945, pp. 2-3.

Special items arising out of the war. In American Institute of Accountants, Contemporary Accounting, Chapter 10.

1946 Address before New York society of security analysts, February 6.

Problems of corporate financial reports and accounting in the reconversion period. (Summary of address before the New York society of security analysts.) Analysts Journal, Volume 2, Second quarter, 1946, pp. 39-46.

Some current developments in accounting principles. (Address before the Ohio society of certified public accountants, September 27, 1945.) Ohio Certified Public Accountant, Volume 5, Summer, 1946, pp. 1-9.

1947 Recent developments in accounting in the United States. Accountancy, January 1947, pp. 6-9; February 1947, pp. 31-34.

Remarks of the incoming president. In American Institute of Accountants, Challenges to the accounting profession, 1947, pp. 4-5.

The increasing significance of the income statement. (In Michigan accounting conference, Technical papers ... Michigan accounting conference, November 13, 1947, pp. 17-23.) Reprinted in Journal of Accountancy, Volume 85, January 1948, pp. 10-19.

Institute's new president sees freedom as accountancy's goal. Journal of Accountancy, December 1947, pp. 451-452.

1948 Depreciation and inventory reserves. (Address before American Management Association, January 16, 1948.)

The accounting profession in 1948. New York Certified Public Accountant, Volume 18, May 1948, pp. 351- 360.

Problems in reporting corporation income. Harvard Business Review, Volume 26, September 1948, pp. 513- 526. (Paper presented as the Dickinson lectures before the Harvard University Graduate School of Business Administration, April 21 and 22, 1948. Published in two parts in Harvard Business Review.)

Concepts of income. Harvard Business Review, Volume 26, November 1948, pp. 680-692. (Paper presented as the Dickinson lectures before the Harvard University Graduate School of Business Administration, April 21 and 22, 1948. Published in two parts in Harvard Business Review.)

Problems of the accountancy profession in the United States in 1948. Canadian Chartered Accountant, Volume 53, October 1948, pp. 189-198.

Relationship of accounting to other factors in accurate reporting of inflationary income. Journal of Accountancy, Volume 86, November 1948, pp. 361-369.

Retiring president says profession exerts wide influence on outside world. Journal of Accountancy, Volume 86, December 1948, pp. 476-477.

Some thoughts about the future of public accounting for women. Woman C.P.A., Volume 11, December 1948, pp. 9-12.

Management of reserves for inventories and depreciation. In American Management Association, Financial Controls and Breakeven Points, pp. 30-39.

Truth about your property values--the accounting point of view. In Controllers Institute of America, Replacement Costs and Depreciation Policies, pp. 12-28.

1949 Economic restrictions on earnings determined under present accounting conventions. Journal of Accountancy, Volume 87, January 1949, pp. 77-80.

Lessons from industrial accounting. Municipal Finance, Volume 22, August 1949, pp. 3-8.

Current accounting problems in the presentation of financial statements. (Speech presented at the Great Lakes accounting conference, Milwaukee, September 12, 1949.)

Accelerated depreciation; criteria for its use. Journal of Accountancy, Volume 88, November 1949, pp. 372- 377.

United States Congress. Corporate profits, hearings before the Joint committee on the economic report, Congress of the United States, eightieth Congress, second session, pursuant to Sec. 5(A) of Public law 304, 79th Congress, December 6 ... 21, 1948. Washington, DC: Government Printing Office, 1949.

1950 Current auditing problems. Accounting Review, Volume 25, Number 2, April 1950, pp. 125-132.

Are too many liabilities kept off the balance-sheet? Pension plans, leases, salary contracts have increased in frequency, amount, and risk since the war. Journal of Accountancy, Technical and professional notes, Volume 89, May 1950, pp. 419-420.

Show difference between lifo and fifo figures wherever possible. Journal of Accountancy, Technical and professional notes, Volume 90, July 1950, pp. 59-60.

1957 Consumer Instalment Credit, Part III, Views on Regulation. United States Federal Reserve System Board of Governors. Washington, DC: Government Printing Office.

1960 New countries ... with new problems; a visit to India, Pakistan, Thailand and other countries of the Far East. Quarterly, Volume 6, June 1960, pp. 24-31. Publication by Touche, Ross, Bailey and Smart.

1964 Henry Mendes; a memorial. Quarterly, Volume 10, March 1964, p. 39. Publication by Touche, Ross, Bailey and Smart.

APPENDIX B

Listing of Writings Attributed to George D. Bailey, With Selected Annotations

(Note: Chronology within years not guaranteed correct)

1938 Practical application of municipal accounting principles. In American Institute of Accountants Addresses presented at the conference on municipal accounting and finance, Chicago, March 28 and 29, pp. 13-18.

Accountants' certificates. Fourteenth annual Michigan accounting conference, pp. 15-20, discussion pp. 20-21.

Introduction to round table discussion on: Accountants' certificates. In American Institute of Accountants Papers on accounting principles and procedures, pp. 75-77.

1939 Practical problems in governmental accounting. Accounting Review, Volume 14, Number 1, pp. 52-56.

 Teach accounting students about governmental accounting.
 Governments should centralize accounting except for treasury
 functions. Nobody pays attention to inventories. Depreciate fixed
 assets of government-owned utilities. It is not necessary for
 governments to be on a full accrual basis.

Auditing procedure--a development to meet changing conditions. In Ohio State University Proceedings of the second annual institute on accounting.... May 19 and 20. pp. 63-75.

Testimony of the S.E.C. hearings on auditing practice and procedures at the Central states accounting conference, June 2, 1939; first section presented by George D. Bailey.

 (Speech.) Auditing is based on the auditor's judgment, based on a
 test of selected transactions. Much of the writing is based on what
 is done in an audit, degree of knowledge of the client by audit
 personnel, and internal structure and procedures of audit firms.

Adaptation of programs for independent audits to internal audit and control. Address before Michigan association of certified public accountants, December 14, 1939.

 (Speech.) Audits are not a complete verification of what was done,
 but rather rest on a test conducted by the auditor. The auditor
 should consider the state of internal controls, including whether
 internal auditors are actually doing internal auditing and
 producing reports or instead are being used for special projects.
 There has been a shift in emphasis from the balance sheet to the
 income statement. An auditor "is bound to approach each audit
 assignment in a spirit of intelligent skepticism." It is advisable
 for companies to have written accounting policies.

1940 Research work of the American Institute of Accountants. Address presented at the Southern states accountants' conference, New Orleans, La., April 26, 1940. Journal of Accountancy, July 1940, pp. 50-57.

 (Speech.) "One of the immediate necessities of accountancy is
 greater uniformity of understanding of accepted accounting
 principles." (page 50) Despite any findings of scientific research,
 it has to be applied by, and acceptable to, practicing accountants,
 and if the research says to do the opposite of what accountants
 have been doing for so long, then they just won't do it.
 (colloquial interpretation of page 51)

 One of the reasons the Committee on Accounting Procedure and its
 research staff were formed about November 1, 1938 was the shift of
 emphasis from the balance sheet to the profit-and-loss statement
 and a move away from conservatism which might affect future income
 statements. (page 51) There was a growing demand for uniformity in
 accounting. "... while experienced accountants abhorred uniformity
 as such, they did appreciate that it should be possible for two
 different accountants working with the same set of facts to arrive
 at the same determination of the proper principle. There was
 recognition of the fact that some corporate practices permitted by
 law were not necessarily good accounting...." (page 52)

 The committee experimented with the concept of having two separate
 considerations of a proposed release, one for small or unlisted
 companies and the other from the standpoint of listed or regulated
 companies, but found "that the soundness of an accounting principle
 is not dependent upon the size of the company or whether it is
 subject to governmental regulations." (page 53)

 Regarding the authority of the committee's pronouncements, "... it
 was realized that the pronouncements of the committee could have no
 authority beyond that of the standing and integrity of the
 participants in the decision and the reasoning behind it. If a
 pronouncement stands the test of challenge by the profession and
 the test of practice, it will have authority, but if it should
 survive neither of these tests it would have to be re-examined."
 (page 53)

 There was a discussion of some of the topics the committee had
 dealt with. For example, the committee favored showing assets at
 historical cost, but where companies had written up the assets, the
 related depreciation should be based on the written-up value, and
 should flow through the income statement. However, that particular
 subject was especially controversial, and therefore the committee
 was unable to obtain agreement and issue a complete statement on
 the matter, issuing only a statement that depreciation should flow
 through the income statement. (page 56)

Some thoughts on the theory of inventory pricing. In American Institute of Accountants, Experiences with extensions of auditing procedure, 1940, pp. 60-67.

 (Speech.) Should lower of cost or market be discarded in favor of
 cost only? If lower of cost or market is used, should it be in the
 aggregate or item by item? Can accounting approve any other bases
 of determining cost than first-in, first-out?

1941 Problems of inventory pricing. Journal of Accountancy, August 1941, pp. 143-148. Reprinted from Central states accounting conference, Addresses delivered at Accounting clinic ... Stevens Hotel, Chicago, May 28-29, 1941, pp. 87-94.

 (Speech.) Bailey disclosed the issues the research staff and
 committee had been working on, which had resulted in a release by
 the committee, printed in the April 1941 Journal of Accountancy. In
 effect, he was simply doing what today would be called continuing
 professional education, with the subject being an accounting and
 auditing update.

 There were two approaches to "lower of cost or market," that of
 always writing down to market when lower, or writing down to market
 only when the sales value of the inventory is impaired. The
 decision was made to write down only when the value of the
 inventory was impaired.

Cost problems in national defense contracts. Robert Morris Associates monthly bulletin, October-November 1941, pp. 106-111.

 (Speech.) He was assigned this topic, but was unprepared to discuss
 it, so he talked about government contracting in general, and said
 that some things could happen, but did not specify how they should
 be handled.

1942 Accounting in war time. At a joint meeting of the Minnesota Society of Certified Public Accountants and the School of Business Administration of the University of Minnesota, held in Minneapolis, on April 28.

 (Speech.) The government contracts in this war are bigger in dollar
 terms than those in the last war, so the auditing needs are bigger,
 too. Since many of the contracts are cost plus, or cost plus fixed
 fee, there is a need to know what costs are. Given the increased
 demands on the accounting profession, and the reduced supply of
 accountants as many went to war, extensions of time to file SEC
 reports and tax returns are advisable. Audit work should be spread
 out; where good internal control exists, some work should be done
 ahead of year end.

Practice of public accounting in wartime, Journal of Accountancy, July 1942, pp. 18-24.

Reprint of speech listed immediately above.

Accounting problems in presentation of cost-plus-fixed-fee contracts in financial statements. In Michigan accounting conference, Technical papers of the seventeenth annual Michigan Accounting conference, 1942, pp. 23-27. Also in Journal of Accountancy, December 1942, pp. 503-510.

 Bailey was chairman of the American Institute of Accountants
 committee on government audit of contractors' costs. During World
 War I, the federal government had used cost plus a percentage of
 cost as the payment basis for contracts, but this basis gave
 contractors incentives to cheat by padding costs. The government
 had switched to cost plus fixed fee contracts. Due to the entry of
 the United States into World War II, there were suddenly a large
 number of such contracts. This item was a technical discussion of
 the contracts and special accounting treatments arising from them,
 such as the fact that material belongs to the government as soon as
 it is delivered to the contractor's plant, rather than when the
 finished product is completed.

1943 Accounting problems of war contracts. California Certified Public Accountant, August 1943, pp. 2 and 6-13. Also in Journal of Accountancy, September 1943, pp. 211-219.

 (Speech.) By this time, the Committee on Accounting Procedure had
 issued Accounting Research Bulletin 19. He quoted from that
 bulletin, and summarized its provisions. He also told the audience
 some of the things the government was doing to audit contract
 performance, given the government's inability to obtain sufficient
 personnel to do detailed checking. He discussed the fact that
 termination claims (claims made by contractors against the
 government when contracts are terminated early) were to be
 negotiated, the accountants' role in assisting the firm to prepare
 the claim, and the hoped-for acceptance by the government of claims
 audited by outside accountants without doing any more checking.
 With regard to auditing procedure, the government was refusing to
 verify amounts payable to contractors, thus making auditors unable
 to verify receivables. Also, some clients were claiming that due to
 production pressures for the war effort, they simply did not have
 time to take a physical inventory.

Government procedures-existing and proposed. In automotive council for war production. Proceedings of the contract termination conference, September 28, 1943, pp. 4-14.

Public accountant and war contract termination. In Michigan accounting conference, Technical papers of the eighteenth conference, November 1943, pp. 1-7.

Remarks of the chairman. In American Institute of Accountants, Audits under terminated war contracts, 1943, pp. 1-2 and 5-8.

(Speech.) Introduction of Commander J. H. Stewart, United States Navy, who gave a speech.

War contract problems; remarks of the chairman. In American Institute of Accountants, Accounting problems in war contract termination, pp. 1-2.

(Speech.) Introduction of Commander J. H. Stewart, United States Navy, who gave a speech.

There were two listings in the Accountants Index, but this item and the one immediately above are both the same item.

United States Senate Committee on military affairs. Statement of George Bailey, chairman, contract termination committee, American Institute of Accountants. Journal of Accountancy, December 1943, pp. 526- 531.

 (Speech.) He was in favor of the government's accepting the
 termination claim prepared by the contractor with the accountant's
 assistance. In accordance with a resolution adopted at the annual
 meeting of the American Institute of Accountants, he wanted one
 government agency to be able to bind all government agencies
 through negotiated settlements, although the General Accounting
 Office would be permitted to audit after the fact for fraud only.
 Accountants would not certify the reasonableness of the termination
 claim, though, which seemed to surprise Senator Revercomb, who was
 asking questions of Bailey. Bailey asserted that certifying the
 claim would slow down the process, plus require trained personnel
 who were in short supply.

1944 The public accountant and war contract termination. Journal of Accountancy, February 1944, pp. 106-108.

 "... at the present time the prime contractor is made responsible
 for settling the claims of his subcontractors...." (p. 106) The
 accountant can perform a lot of services in this area, but he
 should know what he is doing.

Termination of government contracts from the viewpoint of industry and the certified public accountant. New York Certified Public Accountant, Volume 14, May 1944, pp. 351-361.

 (Speech.) When a war contract has been terminated, get together
 good documentation of costs involved in winding up the contract to
 buttress your case, which will be decided in negotiations with a
 government team. The General Accounting Office says there have been
 a lot of fraudulent cases approved, so some people want to do
 something about it. They are considering getting the office of the
 Comptroller General involved, but we want to keep him out of it. In
 fact, we'd like for one government agency to be able to settle on
 behalf of all government agencies contracting with the same firm,
 even when that particular agency has no knowledge of the other
 agencies' requirements. We also want contractors to be able to
 settle claims with sub-contractors and not have them reviewed by
 the government. So far, claims submitted to the government have
 been cut an average of 30% to 40% because the costs apparently were
 not justified under the contract. Public accountants are not often
 called upon by clients to certify costs claimed in these
 termination claims.

The accountant and war contract termination. Printed elsewhere and in Journal of Accountancy, July 1944, pp. 36-41.

 (Speech.) The government will not accept the independent public
 accountant's report as evidence that the amount of the claim is
 proper. However, many subcontractors' claims are settled by the
 contractor, and the contractor can have the public accountant check
 the subcontractor's claim, plus help the contractor in filing his
 claim with the government. Keep the General Accounting Office out
 of the contract termination process, except to allow them to audit
 after the fact.

Cost phases of war contract termination, New York, National Association of Cost Accountants (now the Institute of Management Accountants), August 1, 1944. N.A.C.A. bulletin, Volume 25, Number 23, section 1, pp. 1235-1254.

 Termination problems. (In Controllers Institute of America,
 Contract termination and industry reconversion: number 1 of annual
 meeting proceedings, pp. 10-20.) The Controllers Institute of
 America is now called the Financial Executives Institute.

1945 Significance of pronouncements on accounting procedure. (Remarks at meeting of committee on accounting procedure of American Institute of Accountants, held December 14, 1944.) Certified Public Accountant, volume 25, February 1945, pp. 2-3.

Special items arising out of the war. In American Institute of Accountants, Contemporary Accounting, Chapter 10.

 This book was intended as a refresher course for accountants who
 had been serving in the military during World War II. This chapter
 discussed war reserves (purported estimates of cost to reconvert
 from war production to peacetime production, plus unspecified
 "contingencies"), cost-plus-fixed-fee contracts, renegotiation
 (government changing the price of a contract retroactively because
 it turned out the contractor made too much profit on it), claims
 under terminated war contracts, and inventories frozen by war
 controls (inventory not permitted to be sold for civilian purposes
 so it would be available for the war effort). It also reproduced
 some Accounting Research Bulletins which dealt with those subjects.

1946 Address before New York society of security analysts, February 6.

Problems of corporate financial reports and accounting in the reconversion period. (Summary of address before the New York society of security analysts.) Analysts Journal, Volume 2, Second quarter, 1946, pp. 39-46.

Some current developments in accounting principles. (Address before the Ohio society of certified public accountants, September 27, 1945.) Ohio Certified Public Accountant, Volume 5, Summer, 1946, pp. 1-9.

 (Speech.) He discussed the work and structure of the Committee on
 Accounting Procedure, which was interested in narrowing differences
 in accounting practice. Purchased goodwill should be amortized.
 "... there has been a shift in the emphasis of accounting from the
 balance sheet to the statement of income." (p. 3) There has been a
 lot of discussion on "what constitutes the most practically useful
 concept of income for the year...." (p. 3) Historical cost is
 sometimes not adequate for the financial statements. (p. 4)
 Quasi-reorganization is receiving attention. (pp. 4-5) The increase
 of the federal corporate income tax rate to 85% highlighted some
 problems, such as charging an expense to retained earnings but the
 related tax benefit to operations. (p. 6)

1947 Recent developments in accounting in the United States. Accountancy, January 1947, pp. 6-9; February 1947, pp. 31-34.

Remarks of the incoming president. In American Institute of Accountants, Challenges to the accounting profession, 1947, pp. 4-5.

 (Speech.) The accounting profession has to do a good job if it
 wants to be free of intrusive government regulation.

The increasing significance of the income statement. (In Michigan accounting conference, Technical papers ... Michigan accounting conference, November 13, 1947, pp. 17-23.) Reprinted in Journal of Accountancy, Volume 85, January 1948, pp. 10-19.

(Speech.)

The Committee on Accounting Procedure had issued Accounting Research Bulletin Number 32, "Income and Earned Surplus." This issue of Journal of Accountancy contained an editorial about ARB 32, a paper attributed to George Bailey defending ARB 32, the text of ARB 32, and a letter from the chief accountant of the SEC saying that application of ARB 32 seems "to be susceptible to abuse and may result in misleading income and earned surplus statements in conflict with published rules and opinions of the Commission.... Under these circumstances the Commission has authorized the staff to take exception to financial statements which appear to be misleading, even though they reflect the application of Accounting Research Bulletin No. 32." (Journal of Accountancy, January 1948, p. 25)

Bailey did not directly defend ARB 32. Instead, he figuratively "waved the flag," saying shortly after World War II had ended, "We know that our free society, a free, competitive enterprise, and our corporate economy go hand in hand." (page 10) He then briefly discussed ARB 23 (Accounting for Income Taxes), 24 (Accounting for Intangibles), 25 (Accounting for Terminated War Contracts), 26 (Accounting for the Use of Special War Reserves), 27 (Emergency Facilities), 28 (Contingency Reserves), 29 (Inventory Prices), and 31 (Inventory Reserves).

ARB 32, Income and Earned Surplus, was defended on the grounds of "sharpening net income." Bailey used that phrase, but he appears not to be the only one. ARB 32 discussed the all-inclusive concept of net income and the current operating performance concept. ARB

32 imposed the current operating performance concept. Accordingly, companies were to exclude from the determination of the year's net income all "material charges or credits ... specifically related to operations of prior years, ... (or) resulting from unusual sales of assets not acquired for resale and not of the type in which the company generally deals, (or) not usually insured against, such as those resulting from wars, riots, earthquakes, and similar calamities or catastrophes ... (or) the write-off of a material amount of intangibles ... (or) the write-off of material amounts of unamortized bond discount or premium and bond issue expenses at the time of the retirement or refunding of the debt before maturity." (ARB 32 as printed in Journal of Accountancy, January 1948, p. 23)

That would give companies an incentive to hide expenses of one year until the following year, at which time they would be required to exclude them from the income statement. That is one of the reasons the SEC was opposed.

ARB 32 was in contrast to ARB 8, which expressed a preference for the all-inclusive concept. The topic was revisited after ARB 32 was issued, resulting in ARB 35, ARB 41, ARB 43, APB 9, APB 11, APB 30, SFAS 4, and SFAS 16 (Kiger and Williams 1977).

Institute's new president sees freedom as accountancy's goal. Journal of Accountancy, December 1947, pp. 451-452.

(Speech.) Excerpts from "Remarks of the incoming president;" see above.

1948 Depreciation and inventory reserves. (Address before American Management Association, January 16, 1948.)

 (Speech.) Inventory reserves assume that the replacement cost of
 inventory will fall. Revaluation of fixed assets, and depreciation
 on the higher value, assumes that the replacement cost of fixed
 assets will not fall. The two positions are not consistent. "It is
 my belief that corporate financial reporting and our corporate
 society is better served by keeping the gains we have made in the
 sharpening of corporate income ... rather than to have the
 disorder, confusion and even frustration that would come from the
 use of arbitrary methods of reducing income...." (page 7 of speech
 manuscript)

 "The position which I have just stated is also that of the
 Committee on Accounting Procedure of the American Institute of
 Accountants, as published in September. This release took the
 position that the time had not come to scrap the traditional policy
 of depreciation on cost, nor had the time come to give Committee
 approval to a choice of the two methods...." (pages 7-8 of speech
 manuscript)

The accounting profession in 1948. New York Certified Public Accountant, Volume 18, May 1948, pp. 351- 360.

 (Speech.) This was essentially the president of the American
 Institute of Accountants visiting the meeting of the New York
 Society and giving the members an update on the political situation
 faced by certified public accountants.

Problems in reporting corporation income. Harvard Business Review, Volume 26, September 1948, pp. 513- 526. (Paper presented as the Dickinson lectures before the Harvard University Graduate School of Business Administration, April 21 and 22, 1948. Published in two parts in Harvard Business Review.)

 (Speech.) This speech was delivered to the Harvard School of
 Business Administration. The Harvard class of 1949 was the first
 postwar class, and was subsequently referred to as "the class the
 money fell on" because the class members did so well in their
 careers.

 If corporations do not provide information about themselves, then
 people might demand that the government take over the
 responsibility of providing information. People do not believe
 corporate reporting. (p. 514) People do not understand the role of
 profits. (p. 515) He recommended adult education in accounting
 because so many people were ignorant about it and the business
 press was inadequate. (p. 517) Someone needs to determine who reads
 corporate reports and what they use the reports for. (pp. 518-519)
 The stockholder needs qualitative information, not just
 quantitative information, and the information needs to be
 comparable across companies. (p. 520) Instead of showing various
 steps in the computation of net income, there should be just one
 figure. (p. 521) He discussed the evolution in accounting
 terminology. (p. 522) Comparability across companies is desirable,
 even if that means reducing the variety of accounting principles.
 (p. 523)

Concepts of income. Harvard Business Review, Volume 26, November 1948, pp. 680-692. (Paper presented as the Dickinson lectures before the Harvard University Graduate School of Business Administration, April 21 and 22, 1948. Published in two parts in Harvard Business Review.)

 (Speech.) This speech was delivered to the Harvard School of
 Business Administration. The Harvard class of 1949 was the first
 postwar class, and was subsequently referred to as "the class the
 money fell on" because the class members did so well in their
 careers.

 There is discussion concerning whether the income statement is
 intended to show the results of operations for the year or whether
 it is to be the channel whereby all items of income, cost, and
 expense get into the accumulated earnings of the company.
 "... obviously, the figure of earnings for the year is the important
 item." (p. 680) "I regard the all-inclusive argument as a dangerous
 doctrine...." (p. 681) The Committee on Accounting Procedure has
 regularly supported exclusion of items from earnings "which would
 result in distortion or possible misleading inferences," and
 reaffirmed its position in Accounting Research Bulletin Number 32
 which recommended exclusion under stated standards, but "the
 American Accounting Association has consistently advocated the
 all-inclusive theory...." (p. 682) The SEC is disinclined to accept
 the position of the Committee on Accounting Procedure. (p. 683) He
 complained that the financial press tended to call the bottom-line
 figure "earnings," after inclusion of special items, instead of the
 allegedly single-year figure above which purported to be earnings,
 although on page 681 he had conceded that there had been many
 abuses in calling items special items. (p. 684) A research group is
 trying to define accounting terminology, including the various
 concepts of income. Financial statements are a combination of
 accounting, tax, legal, and economic concepts. (p. 687) It is
 desirable to minimize the variety of accounting practices among
 companies. (p. 689) Corporate income taxes should not be based on
 annual corporate income, unrealized income, nor "inventory profits
 except on the basis of current replacement costs," nor to income
 based on depreciation at historical cost. Corporate income taxes
 would be levied only on what was paid out as dividends to
 shareholders; income retained in the business apparently would
 escape taxation. (pp. 689-690) Financial statements adjusted for
 general price level changes might be desirable; we observe that
 other people have advocated their use. (p. 691)

Problems of the accountancy profession in the United States in 1948. Canadian Chartered Accountant, Volume 53, October 1948, pp. 189-198.

Relationship of accounting to other factors in accurate reporting of inflationary income. Journal of Accountancy, Volume 86, November 1948, pp. 361-369.

 (Speech.) A survey showed that most user groups of financial
 statements do not want general-price-level-adjusted figures for
 fixed assets to replace historical cost. Of those in favor, many
 would be satisfied with supplemental disclosures, rather than
 replacing the historical-cost financial statements.

Retiring president says profession exerts wide influence on outside world. Journal of Accountancy, Volume 86, December 1948, pp. 476-477.

 (Speech.) He was glad he had been president for the past year. The
 Institute is a good organization.

Some thoughts about the future of public accounting for women. Woman C.P.A., Volume 11, December 1948, pp. 9-12.

Management of reserves for inventories and depreciation. In American Management Association, Financial Controls and Breakeven Points, pp. 30-39.

 (Speech.) Most of this is a rehash of earlier speeches. For
 example, it includes this wording, which also appears in
 Depreciation and inventory reserves. (Address before American
 Management Association, January 16, 1948.) See that entry above.

 "The position which I have just stated is also that of the
 Committee on Accounting Procedure of the American Institute of
 Accountants, as published in September. This release took the
 position that the time had not come to scrap the traditional policy
 of depreciation on cost, nor had the time come to give Committee
 approval to a choice of the two methods...." (page 34)

 Although Bailey advocated historical cost, this speech contains the
 possibility that current replacement cost could be disclosed as
 supplemental information (page 35). On page 37, however, he says,
 "it is still possible to set up on the books current values of
 facilities and take depreciation on such current values against
 earnings. This, of course, requires objective evidence as to the
 propriety of the amount written up and requires a continuation of
 the new position, once started. It requires that the transaction be
 entered into in good faith in order to avoid the aura of
 impropriety that in the past has surrounded such write-ups. But it
 is a possible method. I think, myself, that it has more to
 recommend it than appears at first glance...."

Truth about your property values--the accounting point of view. In Controllers Institute of America, Replacement Costs and Depreciation Policies, pp. 12-28.

1949 Economic restrictions on earnings determined under present accounting conventions. Journal of Accountancy, Volume 87, January 1949, pp. 77-80.

He discussed inventories, plant facilities, and taxation as impacted by changing price levels.

Lessons from industrial accounting. Municipal Finance, Volume 22, August 1949, pp. 3-8.

Current accounting problems in the presentation of financial statements. (Speech presented at the Great Lakes accounting conference, Milwaukee, September 12, 1949.)

Accelerated depreciation; criteria for its use. Journal of Accountancy, Volume 88, November 1949, pp. 372- 377.

 With the changing price level whereby cost of fixed assets are
 rapidly rising, companies have been reporting straight-line
 depreciation on older, less-costly assets. That straight-line
 depreciation is nowhere near the amount it will take to replace the
 assets. Since we are not revaluing the assets on the balance sheet,
 accelerated depreciation will yield a result which is part of what
 is desired.

 United States Congress. Corporate profits, hearings before the
 Joint committee on the economic report, Congress of the United
 States, eightieth Congress, second session, pursuant to Sec. 5(A)
 of Public law 304, 79th Congress, December 6 ... 21, 1948.
 Washington, DC: Government Printing Office, 1949.

1950 Current auditing problems. Accounting Review, Volume 25, Number 2, April 1950, pp. 125-132.

 (Speech.) Accountants in small towns are adequate to audit small
 companies because they know the small companies very well. (page
 126) However, what was of interest to Bailey was larger businesses.
 The auditor should obtain a knowledge of the company's internal
 control, and should lay out an audit program. (page 127) "It is a
 commonplace to be critical of college graduates because of their
 inability to write either legibly or logically.... The way to be
 able to write is to have practice in writing. If it is possible in
 the colleges to find more specific problems to be developed in
 writing analytically and logically, there will be much benefit."
 (page 128) He also discussed timing of audit procedures, mandatory
 procedures (page 129), accounts receivable (page 130), and
 inventories (page 131). "The profession is not satisfied that it
 has reached proper standards of disclosure. At the present time,
 the desires of the public for more information clash with the
 desires of management to disclose no information that will be
 competitively harmful...." (page 132)

Are too many liabilities kept off the balance-sheet? Pension plans, leases, salary contracts have increased in frequency, amount, and risk since the war. Journal of Accountancy, Technical and professional notes, Volume 89, May 1950, pp. 419-420.

 Regarding leases, "there has been some suggestion that the
 footnotes show the minimum liability by years or blocks of years.
 This is likely to be misleading. As leases run out, new ones have
 to be written. I suggest that the basic information can be given by
 showing each year the total rentals for that year with the other
 correlated leasehold expenses, thus showing the extent of annual
 charges and the expectations thereof." (page 420)

 Regarding pensions, "the important point is to show all current
 pension costs each year as an expense. I see no need to show the
 liability for past service as a liability, and a corresponding
 amount as a deferred charge." (page 420)

Show difference between lifo and fifo figures wherever possible. Journal of Accountancy, Technical and professional notes, Volume 90, July 1950, pp. 59-60.

The title is an accurate description of the piece.

1957 Consumer Instalment Credit, Part III, Views on Regulation. United States Federal Reserve System Board of Governors. Washington, DC: Government Printing Office.

 Businesses were generally opposed to imposition of controls on
 consumer installment credit. Where businesses did not oppose such
 controls, that was only if the controls were severely limited in
 their impact.

1960 New countries ... with new problems; a visit to India, Pakistan, Thailand and other countries of the Far East. Quarterly, Volume 6, June 1960, pp. 24-31. Publication by Touche, Ross, Bailey and Smart.

1964 Henry Mendes; a memorial. Quarterly, Volume 10, March 1964, p. 39. Publication by Touche, Ross, Bailey and Smart.

REFERENCES

Accounting Hall of Fame. Date unknown. Material faxed to the author in June, 1995.

American Institute of Accountants (1947). Yearbook, American Institute of Accountants, 1945-1946. (New York: American Institute of Accountants).

American Institute of Accountants (1948). Yearbook, American Institute of Accountants, 1947 (New York: American Institute of Accountants).

Burns, Thomas J. and Edward N. Coffman (1976). The Accounting Hall of Fame: Profiles of Thirty-Six Members. (Ohio State University)

Carey, John L. (1970). The Rise of the Accounting Profession to Responsibility and Authority, 1937-1969. (New York: American Institute of Certified Public Accountants).

Committee on Accounting Procedure, American Institute of Accountants (1947). Income and Earned Surplus; Accounting Research Bulletin No. 32. Printed in Journal of Accountancy, January 1948, pp. 20-25.

Deloitte & Touche (Date unknown). Material faxed to the author in June, 1995.

Kiger, Jack E. and Jan R. Williams (1977). An Emerging Concept of Income Presentation. Accounting Historians Journal, Fall, pp. 63-77. Reprinted in Coffman, Edward N., Rasoul H. Tondkar, and Gary John Previts (1993). Historical Perspectives of Selected Financial Accounting Topics. (Homewood, IL: Irwin).

Staff. (1958). George D. Bailey: A Man Who Cannot Sit Back. Journal of Accountancy, March 1958, p. 8.

Staff. (1968). Institute Leaders Elected to Hall of Fame. Journal of Accountancy, Volume 125, June 1968, p. 8.

The History Factory (Date unknown). Material faxed to the author in June, 1995.

Touche, Ross, Bailey & Smart (1967). The Quarterly. March 1967.

Michael M. Grayson, Texas A&M International University

Table 1: Characteristics of a Profession

1. A body of specialized knowledge.

2. A recognized formal educational process for acquiring the requisite
 specialized knowledge.

3. A standard of professional qualifications governing admission to
 the profession.

4. A standard of conduct governing the relationships of the
 practitioners with clients, colleagues, and the public.

5. Recognition of status.

6. An acceptance of the social responsibility inherent in an
 occupation endowed with public interest.

7. An organization devoted to the advancement of the social
 obligations of the group.

Source: Carey 1970, 266