Abstract "Third parties" refers to anyone other than the auditor and his client, the two parties who have agreed between themselves as to the scope of the work to be done in a specific case. It includes the stockholders when examining the certified accounts of their corporation; credit men and others when examining the auditor's statement on a given concern as a basis for granting credit to it; courts and other governmental officials when examining certified statements purporting to set forth certain facts produced as evidence. The auditor's responsibilities include maintaining a balance sheet, creating a test audit. The auditor can best carry out his responsibilities to third parties by removing the common misunderstandings. If auditors and third parties agree on a classification, misunderstandings are avoided because the auditor can readily state within which classification a particular financial statement falls; the third party can quickly satisfy himself as to whether such a financial statement serves his immediate purpose and if it does not, he can ask for a specific modification.

Abstract Since 1925, John R. Wildnzan as chairman of the Committee on Education, American Institute of Accountants, has endeavored to procure the general adoption of a classification of accounting services. The original report was prepared September 9, 1925. Since then the matter has been discussed at each meeting of the American Institute of Accountants, by the American Society of Certified Public Accountants, the New York Society of Certified Public Accountants and the American Association of University Instructors in Accounting. The classification considered by the 1980 meeting of the American Institute of Accountants is not yet available for publication. The article attempts to discuss the differences between two classifications but the author is very much interested in having a uniform classification of accounting services come into general use. The importance of such a classification of accounting services for instructional purposes in auditing courses will he obvious to any one. From the standpoint of instructing students who expect to become professional auditors, a recognized classification of accountancy services enables the teacher to state definitely that there are certain recognized classes of audit work and point out the objects to be accomplished by each class of audit.

Abstract As the capital asset accounts and the reserve for depreciation provided therefore are cumulative from the inception of the business, the auditor analyzes these accounts for the entire period to ascertain how they were built up. This is necessary even though the appraised sound value at the balance sheet date will be used as the basis for issuing securities because errors either in the asset account or in the depreciation reserve also affect the net profits available for interest and dividends. All increase in physical assets is admitted to be an addition or betterment, provided it does not replace a previously existing asset. If it does, it would seem best to retire the old asset and treat the new one as an addition. If a new machine is purchased solely as reserve equipment the question is occasionally raised as to whether it constitute an addition. While it will not increase plant output, it may be expected to avoid delay in production. Cost includes, in case of purchased property, all expenditures required to install the property ready for use, including invoice price, freight and cartage inward, installation expense.

Abstract One of the greatest events in accounting history was the International Congress on Accounting, held in New York during the week of September 9, 1929. Despite the variation in laws governing accountancy and in the forms in which accounting practice is conducts, a remarkable unanimity was recognized by everybody as existing in the problems faced by the profession throughout the world. There are two views rather definitely set professional auditing over against social economics; they contrast shareholder's desire for information concerning the remainders of original investments with managers' desires for information concerning the intricate details of profit making. To apply reproduction costs to the balance sheet would place the statement, therefore, in conflict with prudence and the sound principle of realized profit only. But on the other hand, the author points out, to apply only past costs in cost accounting would be to deprive the management of current information very necessary to proper market judgment, for competition is going to be most felt from those who most recently bought in the market and thus have secured a tangible new base for their pricing policy.