Auditing and Cost Accounts; Part I - Auditing Volume 11 (Paperback)

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1911 edition. Excerpt: ...may be useful to state the position which public accountants claim to take up in giving their certificates. Accounts should show the actual facts, that is to say the profits stated should be as far as possible the actual profits earned by the undertaking, and the wording should be such as to truly and correctly describe the nature of the various items; the balance sheet should show the true value of the assets, or where that is not possible or expedient in the interests of the stockholders, should state the basis on which the valuation thereof is taken, and the excess, if any, o"ver actual value; and the wording adopted should be such as would explain to any reasonable business man the nature of the items included in each group of figures. The accounts are those of the directors, and they are necessarily the final arbiters of the form which they should take. But, if the independent auditor objects to any of the items as not being properly described, or to the statement as a whole as not showing the true profits or the true values of any of the assets or liabilities, it will be his duty to qualify his certificate by embodying his objection therein. If he were appointed by the stockholders, it would be his further duty in the event of the directors declining to affix his certificate to the accounts, to take the earliest opportunity of communicating his views directly to the stockholders. The reason of this attitude is that the corporation is the property of the stockholders and not of the directors as such, the independent auditor being, in this case, the representative of the stockholders to carry out fully the inspection of the accounts which, in a private partnership, each partner would undertake for himself. The directors, being...