In 1973, the AAA's Committee on Basic Auditing Concepts distinguished the respective roles of management and auditors (AAA 1973). Management is responsible to record, summarize, and communicate financial information to financial statement users. Auditors are responsible to communicate to users an opinion regarding the reliability of the financial information provided by management. The view of the Securities and Exchange Commission (SEC) regarding bookkeeping services, held since June 1940, is consistent with this division of responsibility. In contrast, the accounting profession took the position in 1949 that auditors can objectively audit financial statements with which they assisted in the preparation, and continues to hold that position to the present day. The evolution of these divergent positions regarding the respective roles of management and auditors is the subject of this paper.

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