47,000 60,000 5,980 50,000 60,000 6% notes due $3.000 annually commencing August 1 1977 Term loans payable to banks will provide in the near future 10,600 6 Payable within one year, the Company's current assets at year end 1976 covered these abilities by a current ratio of 2.58 to 1 7 Borrowings used to expand Koppers income producing base Shareholders benefit as this added capital generates earnings in excoss of interest costs on the debt 8. Differences in accounting rules and tax regulations result in cer tain income and expenses in finan cial reports that are not included in tax reports in the same year This total represents the taxes on the difference that will be paid in future years 9 The total common sharehold ers ownership in Koppers Equal to $16.47 for each share of com mon stock outstanding at the end of 1976, versus $14 57 at the end of 1975 8 31,074 30.304 Senator METCALF. We have rollcalls scheduled at 12:15, 12:50, 2. and 2:15, or as close thereto as possible. I am going to adjourn this hearing until 1 o'clock. I am going to try to get an amendment into the farm bill. I must frankly say I am just as interested in wheat as I am in accountants, with all due deference to the accountants. However, I feel that I can be back at 1 o'clock. Hopefully, we can finish up Mr. Auerbach of Coopers & Lybrand at that time. Unless it is inconvenient for you, Mr. Auerbach. Can you come back at 1 o'clock or would you rather come back Thursday? Mr. AUERBACH. No; 1 o'clock would be fine. Senator METCALF. That is the rollcall. I will be back. I may not be back precisely at 1 p.m., but I will be as close to 1 as I can be. Thank you very much. [Whereupon, at 12:15 p.m., the subcommittee recessed, to reconvene at 1 p.m., the same day.] AFTER RECESS [The subcommittee reconvened at 1 p.m., Hon. Lee Metcalf, chairman of the subcommittee, presiding.] Senator METCALF. The subcommittee will come to order. This is a continuation of our hearings on accounting and auditing practices and procedures. We had two of the so-called Big Eight firms testify this morning. We are going to have a third, Mr. Norman Auerbach, managing partner of Coopers & Lybrand. He is going to testify this afternoon. Before you start into your formal testimony, Mr. Auerbach, what is the difference between a partner and a managing partner? TESTIMONY OF NORMAN AUERBACH, CHAIRMAN, Mr. AUERBACH. The managing partner is the person who has the responsibility for the management of the firm apart from the conduct of engagements. Generally speaking, when one thinks in terms of an engagement partner, he is the person who would have the responsibility for the supervision, conduct, scope, and so forth, in the audit of a particular client; whereas, the managing partner gets involved in such things as administration of the practice itself. Senator METCALF. He is the executive officer, the director, administrative officer of the firm. Mr. AUERBACH. The chief executive officer of the firm. Senator METCALF. When you get to be a managing partner, and I assume that you work up to that, do you rather abandon a good deal of your accounting practice then? Mr. AUERBACH. To some extent, when you are involved in management, it is difficult to stay abreast of all the current developments in detail; but you are required to keep abreast of the decisions made by accounting groups and other groups that do impact your clients. So I would be particularly concerned with the bottom-line impact of FASB's statements and audit committees' statements, as well as other |