The National Association of College and University Business Officers has taken major strides toward meeting the responsibility for establishing accounting and public reporting standards within the field of higher education. The need for improvement in the reporting procedures has been generally agreed on. It is imperative that revision of the manual for financial reports and an audit guide seek common ground, and to this end the author has suggested some significant areas of controversy for discussion. The first area deals with the nonprofit nature of educational institutions; they cannot be viewed in terms of profit and loss, since they are primarily in the business of spending money as wisely and productively as possible. Secondly, colleges and universities generally approach financial management as an integrated function, dealing with the resources and needs of the total institution over a period of time. A third controversial topic deals with the setting aside of funds to meet anticipated needs and the alternative methods of disclosing these restricted and unrestricted funds. The prime vehicle for disclosure suggested is a separate funds statement to accompany a subsidiary operating statement. (JMF)