Audits of Motor Carriers
by RUSSELL D. TIPTON Partner, New York Office
Presented before The New York State Society of Certified
Public Accountants, New York—November 1961
ONE OF THE prime purposes of an audit is to enable the auditor to express an opinion with respect to financial statements included in annual reports to stockholders. Certified public accountants were therefore very much interested this past year in the notice given by the Interstate Commerce Commission in docket 33581 of its intention to issue a rule providing that no carrier subject to the Commission's jurisdiction shall issue financial statements for public distribution that are inconsistent with the uniform system of accounts prescribed by the Commission and with reports filed with the Commission by the carrier.
Many certified public accountants because of their interest in the impact of the proposed rule on reports to stockholders wrote letters to the Commission in reply to its request for data, views, and comments
with respect to the proposed rule. The president of the American
Institute of Certified Public Accountants submitted a letter to the Commission on behalf of its members containing the view that managements
of companies subject to the Commission's jurisdiction should have the responsibility and freedom to report to the investing public in conformity with generally accepted accounting principles.
The Commission has not yet issued a decision on this matter, but it is expected that a decision will be released before the end of the year.*
Before a CPA can express an opinion with reference to generally accepted accounting principles, he must determine whether the financial
statements prepared in accordance with the uniform system of accounts
include variances from generally accepted accounting principles and whether such variances are of sufficient materiality to be covered in his opinion.
I shall not go into any detail concerning these variances at this time inasmuch as a discussion of the differences between Interstate
*The Commission has since issued its rule that permits regulated carriers to prepare reports for stockholders and others in accordance with generally accepted accounting principles (with disclosure in footnotes of any variations from the Commission's prescribed accounting rules).