The Trueblood Study Group on the Objectives of Financial Statements (1971-73): A Historical Study

This paper examines the background and work of the AICPA’s Accounting Objectives Study Group, chaired by Robert M. Trueblood, which issued its important report in October 1973. In particular, the research is informed by interviews with three members of the Study Group and with four of the principal members of its research staff. Evidence is presented on the members of the Study Group who supported, or did not support, various positions in the report, including their apparent reasons, as well on the influential role of the staff in shaping the report. The conclusion is that the full-time staff, abetted by the financial analyst member of the Study Group, played the key role in driving the thrust of the final report, which recommended that financial statements should provide users with information about the cash-generating ability of the enterprise, and eventually the cash flow to the users themselves. This recommendation resonated with the FASB and with standard setters around the world.