The New York herald., 1877-02-12
DEFALCATl0NS AND EMBEZZIEMENTS

IMPORTANCE OF FREQUENT PROFESSIONAL AUD
1TING-pREvENrIoN BETTER THAN CURE.
To ERIToR THE HERALD:-
In view Of tho many and increasing number of en-.
bezzlcmcnts that occur in this metropolis and else
where In America, have been struck with tho urgent
necessity there exists that bankers, merchants ana
corporations books and accounts should DO overlooked
and audited by independent. accurate and reliable OK.
perts and accountants. There tens OF thousands
OF merchants. storekecpcrs and others, who having
implicit faith in their booKkccpers ntentcd to
let years roll by without knowing anything OF their
affairs than they CLEAN IRON u statement handed
to them periodically by said bookkeeper, which in
very many cases Is as comprehensive to the store
keeper or merchant much Arabic or Hndoostanee.
Tho very point that Is considered security and
strength VIZ, tho TACT Of tho bookkeepcr having been
in tho employ for a number Of years, is in ITSELF
weakness without frequent auditing and invcstga,
tions having once made erroneous entry or
entries TO cover dcalcaton, 10 is tho simplest matter
for average bookkecper to cover tho same up
year by year, sc long as his acts and writings
are accepted to DO straightforward. There is no
expert employed to overhaul his books and
and his employer Is without suspicion. perhaps as
in many cases, unable personally to check the real
state of his affairs. What better example can cite
than the late large deialcaton suffered by Mr.. Il. T.
BaDbitt ana tho cmbczzemont by the much trusted
cashier OF the First National Bank of Monrosc Had
competent ''p.otcssioLa' accountant boon EN-.
poyed by the former to spend say three four days
every month in auditing anu investigating his ac-
counts at rining expense. he would have saved
from loss OF some hundreds OF thousands OF dolIars
usc tho word ''proiessionai," advisodIy because
hold that It IL entirely misnomcr for
to call himself an expert and accountant who has
merely kept certain set Of books for a certain
number OF years.
To be uu mart n mi huv nrn etius,d in
profession tor very many years, and being almost
detective, should know by experience the different
and employers may bc robbed and also how discover
them. Bcng known as u professional accountant my
seli u may DO considered by some Of your readers
increase my business, but II, in bringing be-
iorc tho public great and crying evil and In
showing them tho means to prevent this evil, | do
happen 10 add some gris to my mill, think the end
justics the measA In the matters OF corpo rations
insurance companies &c, &c. hold that the period
&c, are unsatisfactory, incomplete and uncertain.
State auditors ana examiners are paid so much per
annum, with no responsibility and no reputation to
make, aud, ns rule, take Tor grartou whatever Is
placed before them by presidents. cashiers or book.
keepers Take, as an example, the many failures Of
late among tho savings banks and Insurance com.
panics There 10 ~cil known case Of q casher OF a
bank, who being called upon to produce his cash Tor
inspection. and having brought up several bundles OF
thousand dollar bills, took them back TO tho vault
produceda appeared further and tho
counting concluded and everything was certified to
as being correct II tho Inspection discoy.
(norc 0y accident than ohcrwisc hat he brought
back the same packages and had puroined amount
OF SO O0O This could not TO expert who by
his profession, cannot take anything antcd or TO
be correct until so proved aud who, having rcputa.
to make or TO maintain, dare not certify To
counts being correct until he has examined them
minuteIy and como to conclusons beyond pcrad-
venture.
Deialca,ion after dcfacation aud cmbczzicmeut
after cinbezzcmcnt occur, and yet the mercantile
community do not seem to realize the truth and
OF the old adaec that "prcycntion IL better than
cure" Most OF my business consists IN examining
and auditing books and accounts alter
have occurred. One act OF dishonesty having been
the question II given mo to propound sof
how much have Dccn robbcdy" whereas, had these
same accounts been gwen to an expert 10 audit IN
former years, In all probability the dciaication would
have been committed and the corporation banker
or merchant would have saved much money aud
harnss OF mind.
/ have already taken up too much Of your valuable
space, and, with your PERMISSION WILL Ia course
OF few days. give your numerous readers further and
more convincing proof OF how necessary ~ tor
all business men, bankers and corporations to have
their books and uccounts efficiently and frequently
audited and examined.
II. sALOMoNs, No. 20 Broad street