The doctrine of justification involves a legal matter of the highest order. Indeed it is the legal issue on which the sinner stands or falls: his status before the supreme tribunal of God.
When we are summoned to appear before the bar of God's judgment, we face a judgment based on perfect justice. The presiding Judge is himself perfectly just. He is also omniscient, fully aware of our every deed, thought, inclination, and word. Measured by the standard of his canon of righteousness, we face the psalmist's rhetorical question that hints at despair: "If you, LORD, should mark iniquities, . . . who could stand?" (Ps. 130:3 NKJV).
The obvious answer to this query is supplied by the Apostle Paul: "There is none righteous, no, not one. . . ." (Rom. 3:10). . . .
God commands us to be holy. Our moral obligation coram Deo (before the face of God) is to live perfect lives. One sin mars that obligation and leaves us naked, exposed before divine justice. Once a person sins at all, a perfect record is impossible. Even if we could live perfectly after that one sin, we would still fail to achieve perfection. Our sin may be forgiven, but forgiveness does not undo the sin. The consequences of the sin may be removed or ameliorated, but the sin itself is not undone. . . .
In our redemptive forgiveness God does not charge us with what we owe. He does not count our sins against us. If he did, no one (except Jesus) would ever escape his just wrath. No one but Christ would be able to stand before God's judgment.
Again, God in his grace may regenerate us, sanctify us, and even glorify us. He might make us perfect in the future. He really does change the elect and will eventually make the justified totally and completely righteous. But even the perfected saint in heaven was once a sinner and has a track record that, apart from the grace of justification, would send him to hell.
Thus, where temporal creatures are concerned, everyone who is once imperfect is always imperfect with respect to the whole scope of the person's individual history.
According to Sproul, then (assuming one particular interpretation of what he is saying--not necessarily the only possible one), when God looks at us in a morally-appraising sort of way, he sees us as records of deeds. In his view, a "good" person is a person whose record is perfect, where there is no sin to be found anywhere. A "bad" person is a person who has at least one sin somewhere in his record. These are the only two categories. Therefore, since all people have at least one sin on their record, all people are "bad" people in God's moral viewpoint. Notice that in this view, it doesn't matter how many sins you have on your record. Whether you have a perfect record with only one small sin, or your record is nothing but one unending series of grave sins, either way you appear exactly the same to God's moral viewpoint. This is why, according to this view, our only hope is to have a righteousness that is imputed to us. Any inherent holiness worked into us by grace has no moral value whatsoever to God. Even if you are entirely perfect except for one sin committed forty years ago, God looks at you and says, "fit only for hell." So your only hope is to hide behind Christ so that when God looks towards you, he doesn't actually see you, but Christ standing in front of you, and he accepts you because he sees Christ. If he were actually to see you, he would have nothing but loathing and would cast you from his presence.
This is a seriously defective and distorted way of looking at things For one thing, it is not biblical. I've already made a biblical case on this point here, so I won't go into too much detail now. But consider what St. Paul has to say in 2 Corinthians 5:9-10: "Wherefore we labour, that, whether present or absent, we may be accepted of him. For we must all appear before the judgment seat of Christ; that every one may receive the things done in his body, according to that he hath done, whether it be good or bad." The bible teaches over and over again (Romans 2:6-8; 1 Corinthians 6:9-11; Galatians 5:6,21; Ephesians 5:5; James 2:14-26; Hebrews 12:14; Matthew 7:24-27; Luke 10:25-28; Revelation 20:13; Revelation 22:12; Matthew 16:27; John 5:28-29; Galatians 6:7-9; etc.) that at the last judgment, we will be judged according to our works. "And these shall go away into everlasting punishment: but the righteous into life eternal" (Matthew 25:46). God will give to us what the moral evaluation of our lives indicates is appropriate. Combine this biblical teaching with what Sproul said above, and the conclusion is that all of us, saved or not, will go to hell. The Protestant viewpoint we are considering here has to fudge this teaching of Scripture in some way or another in order to maintain its conviction that some will be saved. Some Protestants do this by denying that the judgment relates to eternal life and death. Others, like John Piper in this article, argue that "judged according to our works" simply means that God will use our works as a way of seeing if we truly trusted in Jesus, so that the judgment turns out not to be a moral evaluation of our lives at all. But these ideas are contrary to the plain meaning of the biblical texts, which clearly teach that we will receive eternal life or eternal death based on a moral evaluation of our lives--and that some will end up in heaven after this evaluation is completed.
This Protestant viewpoint is also defective philosophically. It depends on confusion regarding how the "legal" relates to the "real." The biblical texts alluded to above do make reference to the idea of God having some kind of record of our deeds and using this to judge us. But what is the point of referring to a record of our deeds? The point of the record is that it testifies to what we are. It is not the deeds themselves, as isolated events, that draws God's wrath (or pleasure). It is the good or bad will manifested in them. God looks at our deeds as an outward testimony to the kind of person we are. If he judges us to be evil and worthy of eternal damnation, he does not punish our deeds, but he punishes us. So our deeds are not, in themselves, the ultimate point. It is what we are, our inward moral condition, that is the ultimate point. An innocent person can be killed by another person or by a tornado. In the latter case, the event is a tragedy, but there is no moral blame involved. Why? Because there is no evil will involved, no heart set in opposition to God and manifesting itself by means of the intentional killing of a human being. In the former case, there is. It is not the outward event that carries the moral quality, but the inward will manifested by the outward act and event.
But if this is true, then Sproul's way of thinking about the judgment is inadequate. He pictures a perfectly righteous person standing before God with one sin on his record from years ago, but instead of God looking at what the actual moral condition of the person is, God looks at the one sin, ignores all the good, and declares the person morally equivalent to an unrepentant God-hater. This makes no sense. A perfectly holy person, fully sanctified by God's grace (for that is the only way anyone will ever become perfectly holy), loves God with all his heart. There is no trace of hatred for God at all in him, no trace of anything morally displeasing. Since God, by nature, must love love to himself, and must hate hatred to himself, he cannot be anything but morally pleased and delighted with such a person. Sure, he committed a sin in his past life--but then he repented of that sin and repudiated it. That sin no longer represents who he truly is, and so it would be absurd for God to treat him not according to his actual character but according to a sin that no longer represents his actual character. God would be acting as if he was blind to reality, seeing people differently from how they actually are. Picture in your mind such a perfectly righteous person, standing before God, his heart full of nothing but love and devotion to God, no trace of any evil in him at all. Can you truly picture God finding such a person morally loathsome, equal to an unregenerate God-hater with no trace of love for God in his heart? We can see that this picture makes no sense at all.
And if God were then to morally accept this person, as Sproul envisions, not because of any moral acceptability in himself, but in spite of his moral loathsomeness, merely because Christ's righteousness is imputed to him, God would show himself to be doubly blind. Not only is he seeing a righteous person as if he were a sinner, having seen this person to be a sinner, he is ignoring this fact and treating him as if he is actually righteous because someone else who is not him is righteous instead! Luther pictured the justified person as a dung heap covered with snow. The dung heap seems beautiful, but only because we can't see it. Is this how we want to picture the moral viewpoint of God? "The heart is deceitful above all things, and desperately wicked: who can know it? I the Lord search the heart, I try the reins, even to give every man according to his ways, and according to the fruit of his doings" (Jeremiah 17:9-10). "For the word of God is quick, and powerful, and sharper than any twoedged sword, piercing even to the dividing asunder of soul and spirit, and of the joints and marrow, and is a discerner of the thoughts and intents of the heart. Neither is there any creature that is not manifest in his sight: but all things are naked and opened unto the eyes of him with whom we have to do" (Hebrews 4:12-13).
The problem here is that this Protestant view is overly legalistic. By this I mean that it forgets that all the law-court imagery of Scripture, with its bar of judgment, records of deeds, etc., cannot be separated from the reality behind it that is its foundation. Righteousness is good and sin is bad because God loves the one and hates the other. And righteousness is nothing other, ultimately, than a good will that loves God supremely, while sin is nothing other, ultimately, than a bad will that doesn't. The whole point of law courts, records, etc., is to bring out the person's true self so that God can make a formal response to it according to the moral reaction of his nature. What this version of the Protestant viewpoint does is to separate the legal from its grounding in the real, and to envision God as having no real concern with the actual moral condition of things but rather as caught up with some legal version of things that conflicts with how things actually are. (This is why Catholics often use the term "legal fiction"to describe the Protestant viewpoint.) So a perfectly righteous person who loves him without a trace of sin can stand before him, but God, looking at some record, seeing one sin in the past, and ignoring the rest of the record, decides to consider him and treat him as if he were bristling with venemous rage against God. And then, having done this, he decides to ignore his own moral judgment and treat him as if he was perfectly righteous by refraining from paying attention to what he really is and instead acting as if he was somebody else. The end result is a bungled mess where reality is ignored and that which is not reality determines God's moral attitudes and judgments.
The Catholic view makes far more moral sense, as well as being consistent with Scripture. It teaches that, without grace, we are all condemned to hell, not because God makes some unrealistic legal evaluation of our record, but because we are, in our unredeemed fallen condition, actually hopelessly at enmity with God. Without grace, all there would be at the final judgment would be countless individuals all full of heartfelt, willful rejection of God and his ways, morally loathsome to him. But, through Christ, there is salvation. God does not save us by pretending that we are Jesus while ignoring who we are, but by uniting us to Christ, uniting us with his life, death, and resurrection, with the power of his divine righteousness, so that, through the Holy Spirit, Christ comes to live within us, and we are changed from being morally loathsome God-haters to being (in the end) perfectly righteous God-lovers, morally beautiful to God. Then, at the judgment, God will look at who we really are, who we have been made to be by his grace, as testified both by our present attitude and by our record which records not only our sins but also our turning from sin, putting it to death, and our righteous acts of love to God, our progressive sanctification, and he will declare us to be, in reality and not just in a legal fiction, fit for heaven.
In this view, we can sing Psalm 18, for example, without cringing (as those who hold the Protestant view under consideration must do):
18 They prevented me in the day of my calamity: but the Lord was my stay.
19 He brought me forth also into a large place; he delivered me, because he delighted in me.
20 The Lord rewarded me according to my righteousness; according to the cleanness of my hands hath he recompensed me.
21 For I have kept the ways of the Lord, and have not wickedly departed from my God.
22 For all his judgments were before me, and I did not put away his statutes from me.
23 I was also upright before him, and I kept myself from mine iniquity.
24 Therefore hath the Lord recompensed me according to my righteousness, according to the cleanness of my hands in his eyesight.
We are truly pleasing to God and worthy of eternal life because of his grace in Christ. Does this mean we can boast? No. Why not? Because all our righteousness is nothing other than an unmerited gift of grace, flowing to us from the sacrifice and merits of Jesus Christ. As the Council of Orange put it, "God loves us for what we shall be by his gift, and not by our own deserving. . . . No man has anything of his own but untruth and sin. But if a man has any truth or righteousness, it is from that fountain for which we must thirst in this desert, so that we may be refreshed from it as by drops of water and not faint on the way." Here is how St. Augustine summed it up ("Treatise on Grace and Free will," chapters 19-20):
And hence there arises no small question, which must be solved by the Lord's gift. If eternal life is rendered to good works, as the Scripture most openly declares: "Then He shall reward every man according to his works:"  how can eternal life be a matter of grace, seeing that grace is not rendered to works, but is given gratuitously, as the apostle himself tells us: "To him that worketh is the reward not reckoned of grace, but of debt;"  and again: "There is a remnant saved according to the election of grace;" with these words immediately subjoined: "And if of grace, then is it no more of works; otherwise grace is no more grace"?  How, then, is eternal life by grace, when it is received from works? Does the apostle perchance not say that eternal life is a grace? Nay, he has so called it, with a clearness which none can possibly gainsay. It requires no acute intellect, but only an attentive reader, to discover this. For after saying, "The wages of sin is death," he at once added, "The grace of God is eternal life through Jesus Christ our Lord." 
This question, then, seems to me to be by no means capable of solution, unless we understand that even those good works of ours, which are recompensed with eternal life, belong to the grace of God, because of what is said by the Lord Jesus: "Without me ye can do nothing."  And the apostle himself, after saying, "By grace are ye saved through faith; and that not of yourselves, it is the gift of God: not of works, lest any man should boast;"  saw, of course, the possibility that men would think from this statement that good works are not necessary to those who believe, but that faith alone suffices for them; and again, the possibility of men's boasting of their good works, as if they were of themselves capable of performing them. To meet, therefore, these opinions on both sides, he immediately added, "For we are His workmanship, created in Christ Jesus unto good works, which God hath before ordained that we should walk in them."  What is the purport of his saying, "Not of works, lest any man should boast," while commending the grace of God? And then why does he afterwards, when giving a reason for using such words, say, "For we are His workmanship, created in Christ Jesus unto good works"? Why, therefore, does it run, "Not of works, lest any man should boast"? Now, hear and understand. "Not of works" is spoken of the works which you suppose have their origin in yourself alone; but you have to think of works for which God has moulded (that is, has formed and created) you. For of these he says, "We are His workmanship, created in Christ Jesus unto good works." Now he does not here speak of that creation which made us human beings, but of that in reference to which one said who was already in full manhood, "Create in me a clean heart, O God;"  concerning which also the apostle says, "Therefore, if any man be in Christ, he is a new creature: old things are passed away; behold, all things are become new. And all things are of God."  We are framed, therefore, that is, formed and created, "in the good works which" we have not ourselves prepared, but "God hath before ordained that we should walk in them." It follows, then, dearly beloved, beyond all doubt, that as your good life is nothing else than God's grace, so also the eternal life which is the recompense of a good life is the grace of God; moreover it is given gratuitously, even as that is given gratuitously to which it is given. But that to which it is given is solely and simply grace; this therefore is also that which is given to it, because it is its reward;--grace is for grace, as if remuneration for righteousness; in order that it may be true, because it is true, that God "shall reward every man according to his works." 
I will conclude with the words of the prophet Ezekiel (18:26-30):
26 When a righteous man turneth away from his righteousness, and committeth iniquity, and dieth in them; for his iniquity that he hath done shall he die.
27 Again, when the wicked man turneth away from his wickedness that he hath committed, and doeth that which is lawful and right, he shall save his soul alive.
28 Because he considereth, and turneth away from all his transgressions that he hath committed, he shall surely live, he shall not die.
29 Yet saith the house of Israel, The way of the LORD is not equal. O house of Israel, are not my ways equal? are not your ways unequal?
30 Therefore I will judge you, O house of Israel, every one according to his ways, saith the Lord GOD. Repent, and turn yourselves from all your transgressions; so iniquity shall not be your ruin.
For more, see here, here, and here.
Published on the feast of Sts. Marcellinus and Peter