By MALCOLM M. DEVORE Partner, Los Angles Office
Presented before the Southern States Accounting
Conference, Oklahoma City — June 1959
WHENEVER I undertake to write a paper on a technical accounting
subject, I inevitably conclude that we must be a very young profession, for we do seem to have so many unanswered problems.
Yet, I suppose one could equally support the proposition that an awareness of unanswered problems is really a sign of increasing maturity, for without maturity of some degree we would be unable to recognize our problems.
In any event, I am certain that we do have problems. And in the field of auditing, our Committee on Auditing Procedure of the American Institute exists to give us help with our problems. This is the function of that Committee and this is why they periodically issue their Statements on Auditing Procedures.
Statement No. 28, entitled Special Reports, is one such statement
and it is the particular one which is now to occupy our attention.
Since we are in the field of reports, I suggest we start our present consideration with audit reports as they existed when I started in the practice of public accounting about thirty years ago. This is a good starting point, not because it coincides with my entry into the profession, but because it was just prior to some significant changes in the accounting profession, and particularly in our reporting practices.
Consider, if you will, a typical opinion (I should say certificate because that's what we called it then and that's what it said it was) as of the year 1929:
We have examined the accounts of the XYZ Company for the year ended December 31, 1929 and hereby certify that the annexed balance sheet and statement of income and profit and loss are in accordance therewith.
We further certify that said statements, in our opinion, present a true and correct view of the financial condition of the Company at December
31, 1929, and the results of its operations for the year then ended.
To those interested in antiques, viewed from hindsight, this certificate
is a little gem. Please note that the auditors—