The Civil Aeronautics Board's Verification of Airline Financial and Operating Data

The Civil Aeronautics Board's (CAB) efforts to improve its accounting and reporting systems have included: (1) permitting airlines to file a single set of reports to satisfy both CAB and Securities and Exchange Commission financial reporting requirements; (2) changing CAB accounting and reporting requirements to make them more compatible with generally accepted accounting principles; and (3) developing an audit guide to help airlines and their auditors establish accounting systems and develop audit procedures which conform to CAB requirements. Additional improvements should be sought during the transition period to a less regulated airline environment. It will be necessary to reassess the existing data reporting requirements and related verification activities. The possibility of increased use of CPA firm audits and expansion of the proposed audit guide should be explored.