We have examined the consolidated balance sheet of Allied Finance Com-
pany and subsidiaries (all wholly owned) as of October 31, 1959 and the related
statements of income and earned surplus for the year then ended. Our examina-
tion was made in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
Subject to the ultimate effect, if any, of a pending income tax matter (as
explained in note 4 of notes to financial statements), in our opinion the accom-
panying consolidated balance sheet and statements of consolidated income and
earned surplus present fairly the financial position of Allied Finance Company
and subsidiaries at October 31, 1959 and the results of their operations for the
year then ended, in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding year except that (1) prior
to the current year the financial statements of the insurance company subsidiaries
were not consolidated with those of the parent company and other subsidiaries,
and (2) during the year under review the finance companies adopted the policy
of deferring development expenses of new loan offices, which had the effect of
increasing net income by approximately $70,600.00. These changes are acceptable