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Statements on Auditing Procedure • Issued by the Committee on Auditing Procedure, American Institute of Certified Public Accountants 666 Fifth Avenue, New York 19, N. Y. Copyright 1962 by American Institute of Certified Public Accountants No, 02 September 1962 Qualifications and Disclaimers (Clarification of Reporting Standards) When an independent auditor's name is associated with financial state-ments which purport to present financial position and results of operations, generally accepted auditing standards (the fourth standard of reporting) require him to express an opinion on the financial statements taken as a whole or, if an opinion is not being expressed, to state that he is unable to express an opinion and to give his reasons. Rule 2.03 of the Institute's Code of Professional Ethics requires com-pliance with the fourth standard of reporting when it states: A member or associate shall not permit his name to be associated with statements purporting to show financial position or results of operations in such a manner as to imply that he is acting as an independent public accountant unless he shall: (a) express an unqualified opinion, or (b) express a qualified opinion, or (c) dis-claim an opinion on the statements taken as a whole and indicate clearly his reasons therefor, or (d) when unaudited financial state-ments are presented on his stationery without his comments, dis-close prominently on each page of the financial statements that they were not audited. The committee considers it desirable to clarify the application of this standard and rule and to provide suggestions whereby the independent auditor, in the exercise of his judgment, may assure himself that his opinions on financial statements will be clearly and unequivocally ex-pressed or, in the absence of an opinion, that the degree of responsibility being taken will be clearly indicated.1 1 This statement is not intended to supersede Statements on Auditing Procedure No. 28. "Special Reports." 59