HASKINS & SELLS
CERTIFIED PUBLIC ACCOUNTANTS
BULLETIN EXECUTIVE OFFICES
HASKINS & SELLS BUILDING
37 WEST 39TH ST., NEW YORK
SALT LAKE CITY
VOL. V NEW YORK, NOVEMBER 15, 1922 No. 11
The Public Demand
PROSPECTIVE purchasers of securities
have a right to ask certain
pointed questions. What about safety
of principal, rate of return on investment,
continuity of return, saleability? Have
the accounts of the company, whose securities
are being offered, been audited
by a reliable firm of accountants? What
do the financial statements show?
Seldom are all the questions answered
in the information issued to the public.
Newspaper advertisements offering securities
vary greatly in form and content.
Such information as appears usually is
summarized from letters of officers who
many not be said to be disinterested. An
examination of several hundred newspaper
announcements which have appeared
within the past six months shows that
only one-fourth of such announcements
referred to accountants as having audited
the accounts. In some cases where accountants
were employed their names were
not mentioned; nor was reference made
to the fact of the employment. In not
one case was an offer made to furnish a
balance sheet or income statement.
The investing public is but an aggregate
of individuals. Funds for investment
originate with the individual. The
demand of the public is but the demand
of a certain number of individuals. Where
is the individual investor who is not concerned
with the questions propounded?
There is a big demand for securities,
but they must be securities properly accredited;
not merely issues in which some
distributing agency is particularly interested.
The public is demanding a clean-cut
showing on the questions raised.
Thus, the financial statements and certificate
of the unbiased public accountant
prove a strong force to the worthy entrepreneur
seeking funds, and his agent who
markets the securities, in satisfying the
demands for information on the part of
the wise investor.
It is not sufficient that offerings are
based on investigation or audit. Such
procedure is but an incident in establishing
the issue in the estimation of the investor.
Regular and systematic examination of a
company's financial affairs is essential to
continued peace and satisfaction of investors.
Making every allowance for petty
mistakes which only minute and wasteful
checking will discover, swiftly transpiring