Consistency, comparability, and disclosure;

              CONSISTENCY,
COMPARABILITY,
and
DISCLOSURE
by Edward P. Tremper
Partner, Seattle
Tn preparing a set of financial statements and our report thereon,
A questions constantly arise as to whether the statements are "con­sistent"
with those of the prior year, whether the statements are
"comparable" with those of the prior year, and whether there is
anything not apparent on the face of the statements which should
be "disclosed" in order that the statements as a whole be reasonably
informative or, as the SEC puts it, in order that the statements be
not misleading.
Actually the three standards are so closely related that it is often
difficult for an auditor to distinguish which of them is applicable to
a given set of circumstances. Consistency is specifically covered by
Generally Accepted Auditing Standards as the second reporting stand­ard:
"The report shall state whether such principles have been con­sistently
observed in the current period in relation to the preceding
period." Comparability and disclosure are covered by the third re­porting
standard: "Informative disclosures in the financial statements
JUNE I960 3