ACCOUNTING: Gray Flannel Civil War

Of all professions, the staid, gray flannel world of accounting last week erupted in a name-calling civil war. The contestants: Chicago-based Arthur Andersen & Co. v. the Securities and Exchange Commission, an industry self-policing board, and five other companies that, like Andersen, are members of accounting's "Big Eight" firms. The issue: How far should the Government go in monitoring the standards used in auditing a company's books?

The background of the argument is that accountants have long been able to follow widely varying methods of calculating a company's profit or loss. As...

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