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IN MEMORIAM
Maurice Moonitz
Professor of Business Administration, Emeritus
UC Berkeley
1910 – 2009
Maurice Moonitz’s association with the University of California, Berkeley, campus spanned an unusually long period—from his enrollment as an upper division undergraduate in 1931 to his death at the age of 98 on July 24, 2009. In those 79 years, he earned bachelor’s, master’s and doctor’s degrees, a full professorship, and the Berkeley Citation upon his retirement in 1978. He was devoted to the University of California, Berkeley.
Maurice started his long life in Cincinnati, Ohio, on October 31, 1910, the son of an immigrant from the Baltic coast of Russia and an American-born mother. As a public school student he favored music, but not to the point of counting on it for a living. He spent two years in the cooperative work program at the University of Cincinnati with the expectation of becoming a “commercial engineer.” The work included a year in a machine shop and a year as a bookkeeper in a savings bank. He has said that he dropped out of the program in 1929 “because of financial conditions at home,” but his taste for adventure may also have played a role in his decision to join a friend on a trip to California in an old Model T Ford. The mechanically challenged car “gave up the ghost” in Roseville, California. The boys were stranded in need of funds, so Maurice took a job as a bookkeeper in a Sacramento bank, with the intention of quitting when he had enough savings to finance the remainder of the trip.
He changed his plans. After two years in the bank, he started his association with Berkeley, graduating Phi Beta Kappa in 1933. He wanted to go into public accounting but found that he “did not have the right ethnic background.” Another job as a bookkeeper (in his third bank) convinced him to go back to school—with the support of a teaching assistantship. His M.S. was awarded in 1936 and the Ph.D. in economics in 1941.
Maurice left the Berkeley campus in 1937, after his Ph.D. qualifying examinations, for a teaching position at the University of Santa Clara. After five years there and two years at Stanford University, he moved into public accounting work in San Francisco with Arthur Andersen & Co. (Perhaps the wartime labor shortage spurred a change in hiring practices in professional firms.) In his three years there, he qualified for the Certified Public Accountant license. By the time he accepted an associate professorship in Berkeley’s Department of Business Administration in 1947, he had significant practical experience that contributed to his success as an academic in a professional field.
A review of Moonitz’s professional career shows a well-balanced record of achievement in the areas of research, teaching, and service, but his scholarly research was strongest. His field, accounting, has several subfields, including financial reporting (to parties outside the reporting entity), managerial accounting (information for management’s use), auditing, tax planning and reporting, and accounting systems design. Maurice concentrated on the first of these subfields, the one that is central in that it focuses on an entity’s balance sheet and income statement, and it is business income on which management, tax authorities, and auditors focus. His expertise in financial reporting earned him recognition as the intellectual leader of the Berkeley accounting faculty for many years, perhaps partly because that area had the most theoretical content. His contributions to financial accounting theory started with an elaboration of his master’s thesis on consolidated financial statements (for a group of related companies). That work was published by the American Accounting Association (the academic group) and had an impact on the “real world” of accounting practice (which cannot be said of many academic accounting publications).
A foray into textbook writing (with coauthor C. C. Staehling) was marked by a unique illustration of economically sound accounting in a highly simplified but theoretically interesting setting. It challenged instructors and teaching assistants as well as students. It was a critical success but a financial failure. Moonitz gained further respect among his peers with several tightly reasoned journal articles in which he used the “balance sheet approach” in analyzing accounting issues, as opposed to the then more popular income statement approach. The two statements are algebraically connected in a double entry accounting system. Maurice can fairly be credited with playing a role in the gradual switch to the balance sheet approach by the bodies that establish the “generally accepted accounting principles” (GAAP) that publicly-held American corporations must follow in their financial reporting.
Moonitz is remembered by many in the accounting world for his involvement in the profession’s efforts to provide a sounder conceptual foundation on which to base GAAP in the early 1960s. On leave from the University, he was appointed director of accounting research for the American Institute of Certified Public Accountants in New York. In that role, he was asked to lead a research program that would provide a conceptual framework on which the committee responsible for repairing and improving GAAP could base its work. Moonitz’s monograph on basic postulates of accounting and the following monograph on broad principles (with coauthor R. T. Sprouse) were widely read but firmly rejected by the Accounting Principles Board, their intended users. The discussion and rethinking that they stimulated, however, led to a different “conceptual framework” that, since Moonitz’s retirement, has been accepted by the principles-setting establishment both in America and at the international level. Moonitz deserves credit for stimulating that movement.
As a teacher, Moonitz fell into the category of tough and respected. He was both demanding and remembered. Some remember him primarily as the leader of the undergraduate accounting teaching staff. Others thought of him primarily as the developer of the two-semester accounting theory sequence for MBAs. Junior faculty valued him as a mentor. After his retirement in 1978, he was called back to teach for five more years.
Maurice was an active participant in many organizations. Although not especially outspoken, he was a good listener and a constructive critic and his contributions often led to leadership positions. On campus, he served as chair of the accounting faculty group for several years and was the first associate dean of the newly formed Graduate School of Business Administration from 1955 to 1959. He edited the University’s newly founded California Management Review in 1959-60.
In the mid-1960s, Professor Choh-ming Li commenced a thirteen-year leave of absence from our business school to serve as founding vice-chancellor of the Chinese University of Hong Kong. He called on Maurice Moonitz to serve as the founding director of its Lingnan Institute of Business Administration, now the Graduate School of Business Administration. Moonitz spent two years there and taught the first accounting courses.
Moonitz became active in the American Accounting Association in the 1950s, first as member, then as chairman of its accounting theory committee. He was vice president in 1958 and president in 1978. He was also active in organizations of accounting practitioners, serving in several positions, including president, of the East Bay Chapter of the California Society of CPAs and as ad hoc editor of the proceedings of the state conference. In 1960, he started a three-year term as the first director of accounting research for the American Institute of Certified Public Accountants in New York and then spent another three years on its principles-establishing committee, the Accounting Principles Board. Those six years gave him special insight into the roles of pressure groups in the establishment of the rules by which American corporations prepare their public financial reports. After that experience, he spoke and wrote a great deal on the difficulties encountered by any body assigned the responsibility of changing the rules against the wishes of corporate managements. A recent example was the pressure that managements of financial institutions applied in March 2009 to get Congress to persuade the Financial Accounting Standards Board (successor to the Accounting Principles Board) to rescind its rule requiring the reporting of financial assets at current market values.
Outside of his professional activities, Maurice’s interests ranged widely and his enthusiasm for exploring almost any subject, especially over lunch at The Faculty Club, was appreciated by many colleagues. He maintained a lifelong attachment to his beloved Cincinnati Reds and played violin in amateur chamber groups and symphony orchestras. He served on the board of directors and as president of Temple Beth El in Berkeley and as president of the local chapter of Phi Beta Kappa. He was named Distinguished Professor by the California Society of CPAs in 1976 and Outstanding Accounting Educator by the American Accounting Association in 1985, and was elected to the Accounting Hall of Fame in 1979. Former Ph.D. students established the Maurice Moonitz Doctoral Fellowship Fund in the Haas School of Business after his retirement.
Maurice married Ruth Helen Lubin in 1934 and leaves behind their three children: Judy Hanson, David Moonitz, and Elaine La Beau, as well as grandchildren and great-grandchildren. After he and Ruth divorced, he married Lee Cynthia Daniels in 1959.
George Staubus
2010