The Ohio Democrat. (Logan, O. [Ohio]) 1886-1906, 1892-06-25
AUDITING BOOKS All NIonr.
Ono Feature OF Expert Accounting tbs
Is Performed IN Secret.


Ono Feature OF Expert Accounting That
Is Performed IN Secret.
"I will venture the ssti mate" said q
well-lsn own public accountant recent.
| ly, "that not one-half of the numbe OF
defalcations and thefts from com mer'
cial and financial institutions and BUSH
ness houses in the city are ever made
public.
business men," he continued, "are
oath to admit that they have been
victimized. They go on the theory
that publicity in such matters might
| iniure their credit. Consequently un'
less the am cunt Is large. every effort is
made to Ike ep the matteY out of court,
even though it entails sople loss
"The public have an idea that the
principal work of an expDft accountant
comes in play in settling estates, exam
ining tho books of orporations, making
Investigations for capital lists who are
about to invest money in business
ventures, opening up new DO olts and go
ing over the books of inS titutions that
have been robbed.
THAT is, however, but small por-
tion of the work. What we call the
auditing feature of the business has de-
veloped largely of late. The conduc-
tion of this reveals much that is start
ling in criminal way and leads me to
the assertion that not ope-hal of the
defalcations committed ase ever made
public"
When asked for more complete exA
planation of the auditing feature the
accountant said: 81 will illustrate with
case that have just concluded.
"rhe books of lacge W holesals
house were balanced by the Office force
at the end of the year. They showed
the Srofits to be far less than was eX-
pected. The partners had an idea Of
forming stock company If their busi-
ness. They did not question the in
tegrity of their cashier, who had been
with them many years. At the same
time they were anxious to find out il
everything was going properly in their
office.
"They explained the circumstances to
me and proposed auditing their books
and outlined the work. 1t amounts to
nothing more or less than this: Every
night after the office was closed the
junior partner of the firm met two ct
my men who were specially detailed
for the purpose. Together they pro-
ceeded to the Office, opened the safe and
worked until O clacll in the morning.
Every individual transaction of the
day was taken up and entered on sheets
of paper as though we were the clerical
force of the house. We never made an
entry on the books or attempted to
check back from them. For month
we continued the work without the
knowledge of the cashier or his as
sistants.
"The result was as l expected. We
discovered an elaborate system of false
entries by which the firm had been de-
frauded for years. The cashier was
taken to task without being informed
that his books had been audited. He
denied his uilt, threatened suits for
slander and assumed a virtuous indig-
nation. When the other set of books
was shown to him, however, he wilted,
confessed his crime and pleaded for
mercy. AS he had been with the house
for a long time he was permitted to re-
sign, and l, of course, am pledged to
secrecy regarding his identity.
''That case," said the accountant in
conclusion, sis but one of the many
where crime is hushed up, and," he
added, "that wholesale house is not the
only one whose books have been
audited, nor do we xpect to terminate
with it the auditing feature OF our
business. IN Y. Herald,