STATEMENT ON AUDITING PROCEDURE
Reports Following a Pooling of Interests
(Supersedes paragraphs 35 and 36 of Chapter 8 of Statements on Auditing Procedure No. 33)
1. When companies have merged or combined in accordance with the accounting concept known as a "pooling of interests" appropriate effect of the pooling should be given in the presenta-tion of balance sheets, results of operations and other historical financial data of the continuing business for years prior to the year of pooling, as described in paragraph 5 of Opinion No. 10 of the Accounting Principles Board.1 If prior year financial state-ments, presented in comparison with current year financial state-ments, are not restated to give appropriate recognition to a pooling of interests, the comparative financial statements are not presented on a consistent basis. In this case, the inconsistency arises not from a change in the application of an accounting prin-ciple in the current year, but from the lack of such application to prior years. Such inconsistency would require a qualification in the independent auditor's report. In addition, failure to give appropriate recognition to the pooling in comparative financial statements is a departure from an Opinion of the Accounting
1 The Accounting Principles Board is reconsidering the entire subject of account-ing for business combinations, including the concept of pooling of interests, and upon completion of this study, it is expected that an Opinion will be issued on the subject.
Issued by the Committee on Auditing Procedure American Institute of Certified Public Accountants
COPYRIGHT 1968 BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, INC.
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