THE NATURAL BUSINESS YEAR: A SHIFT FROM PROACTIVE TO REACTIVE BEHAVIOR BY ACCOUNTANTS

There has been a noticeable decline in accounting publications and research on the natural business year since the early 1960' s, the same time that the AICPA Committee on Natural Business Year ended. Accountants and accounting institutional bodies up to that date had taken a strongly proactive stance on the topic. Since then, and especially since 1970, almost all of the literature on the natural business year has been reactive to IRS pronouncements. This article traces these changes from proactive to reactive behavior, and from financial/managerial accounting considerations to taxation issues. The article ends with support for accountants to be proactive once again on the natural business year and to regain the vitality of the financial/managerial accounting literature on the topic.