Question of insistence;

              66 HASKINS & SELLS September
The Question of Insistence
WH E N may a public accountant stand
on his professional prerogatives and
refuse flat-footed to do what a client wants
done? This question has puzzled account­ants,
no doubt, since their work first
took professional form. And the matter
grows no less baffling as the activities
of public practice enlarge and become more
involved.
Is the accountant justified in taking issue
with a client who expresses a preference for
a certain form in statements? For ex­ample,
some clients have their own ideas
as to the order of current assets, which
order does not accord with the best theory
and generally accepted practice. Some in­stitution
officials object to any designation
of fund reserves except "funds," which is
contrary to one of the first principles of
accounting terminology. Should the ac­countant
refuse to become a party to any
published statement which contains a
glaring violation of this character?
Again, clients have been known to favor
brevity and clever wording of captions
which will avoid any chance of pertinent
questions on the part of stockholders. At
other times requests are made of account-tants
for balance sheets without the com­ments
which have been embodied in
previous reports, or balance sheets without
the usual accompanying income statements.
Generally speaking, there should be no
differentiation in reports on account of
the use to which they are to be put. A
proper and comprehensive report should
serve the purposes of all parties who may
have occasion to refer to it. If, perchance,
there is some part in which the stockholder
is not interested, let him ignore it. If
creditors are not concerned with the income
statement, let them pass it over. But what
is good for one is likely to be good, or at
least useful, for all.
A balance sheet without comments,
qualifying footnotes, or parenthetical ex­planations
is supposed to be like a "clean"
bill of exchange. There are supposed to be
no documents attached. Cash means only
one thing. Notes and accounts receivable
are all considered to be good. Inventories
are the result of physical count, are priced
at cost or market, whichever is lower, and
contain no obsolete, unsalable material or
scrap except at realizable values. A ll
known liabilities are supposed to be in­cluded,
etc., etc.
While the safest procedure is to make
any statement so clear and sound that it
will stand by itself if detached from a
report, this is frequently impracticable
because of the extensive qualification or
explanation required. But serious thought
should be given before any statement is
separated from others, or from the com­ments,
and given out accordingly.
Most of the questions of form, arrange­ment,
and nomenclature have to do with
professional technique. The accountant is
presumed to know more about these
matters than the average client. There is
frequent opportunity for missionary work
along these lines in making clear to clients
the advantages of accepted practice. But
if the client will not be convinced, it is a
matter of small moment that he insists on