Problems of Report Writing
BY RICHARD H. GROSSE PARTNER, PITTSBURGH OFFICE
Presented before the Pennsylvania State University Accounting Study Conference, University Park — July, 1955
In the April 1955 issue of The C.P.A., John L. Carey, Executive Director of the American Institute of Accountants, made this statement:
"Local accounting firms sometimes lose clients who have to turn to big-city banks for financing. One reason is that big-city bankers, being human, like to have the audits made by accountants whom they know. One way to get to know big-city bankers is to go to see them. . .
"Another way to be known is by reputation, and this depends mainly on the quality of work done. There is a fairly widespread belief among big-city bankers that small local accounting firms do not adhere to the highest auditing standards. This is unfair to the great number of fine local firms that adhere to the best practices. But the bankers point out that the larger number of qualified opinions and nonopinion reports come from smaller firms. Such reports, of course, are not necessarily in violation of generally accepted auditing standards, but the bankers say nevertheless that they are not as useful as unqualified opinions. They would prefer to have the audits made by accounting firms that will not accept limitations on the scope of their audit.
"One way a CPA can improve his standing in the eyes of bankers is to persuade his clients to remove limitations on the scope of his audits, so as to permit unqualified opinions on financial statements submitted for bank credit purposes. In this, local bankers should be willing to cooperate by urging their customers who are also clients of the CPA not to restrict the scope of the CPA's examination - as recommended
by the Robert Morris Associates in the pamphlet "Financial Statements for Bank Credit Purposes."
"CPAs who get acquainted with big-city bankers, and who can demonstrate that they adhere to the highest standards of auditing, will be doing a great service, not only to themselves, but to their clients, and to the bankers as well."
I felt that this statement was an appropriate introduction to my subject because the planning committee has announced that this Ac-