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, Objectives of Financial Statements, in October 1973. 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 about 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 research staff, especially George Sorter, in shaping the report. The conclusion is that the research staff, abetted by the financial analyst member of the Study Group, played a decisive role in driving the key recommendation in the report, namely, that financial statements should provide investors and creditors with information about the cash-generating ability of the enterprise, and eventually the cash flows to them. This recommendation resonated with the FASB and eventually with standard setters around the world.