Evening capital journal. (Salem, Or.) 1888-1893, 1892-05-20
AUDITING COOKS AT NIGHT.
One Feature Of Expert Accounting That
IL Performed in secret.

IL Performed in secret.
Il viii venture the estimate. said
a well known public accountant re-
cently. that not one-half Of the
number of defalcations and thefts
from commercial and financial insti-
tuuons ana business houses in the
city are never made public.
"BusinLs5 men, he continued.
ARE luath TO admit that they have
been victimized. They go on the
theory that publicity in such matters
might inirre their credit. Conee-
quently. unless the amount il large,
every effort is made to keep the NIT
ter out of court, even though it CT
tails some loss.
THE public have an idea that the
principal work of an expert account
ant comes in play in settling estates,
examining the books of corporations,
making investigations for capitalists
who are about to invest money in
business ventures, opening up new
books and going over the books of
institutions that have been robbed.
THAT is, however, but a small por-
ton of the work. What we call tie
auditing feature of the business has
developed largely of late. The con-
duction of this reveals much that is
startling in a criminal way, and
leads me to the assertion that not
one-half Of the defalcations commit
ted are ever made public"
When asked for a more complete
explanation of the auditing feature
the accountant said: II will illus
t1ate with a case that / have just
concluded.
THE books of a large wholesale
house were balanced by the Office
force at the end of the year. They
showed the profits to be far less than
was expected. The partners had an
idea of forming a stock company Of
their business. They did not ques-
ton the integrity of their cashier,
who had been with them many
years. At the same time they were
anxious to find out if everything was
going properly in their Office.
'"They explained the circumstances
to me, and l proposed auditing their
books and outlined the work. 1t
amounts to nothing more nor less
than this: Every night after the of
flee was closed the junior partner
of the firm met two Of my men who
were specially detailed for the pur
pose. Together they proceeded to
the Office, opened the safe and
worked until o'clock in the morn
ing.
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 a month we continued the work
without the knowledge of the cashier
or his assistants.
1.-THE result was as l expected.
We discovered an elaborate system
of false entries by which the firm
had been defrauded for years. The
cashier was taken to task, without
being informed that his books had
been audited. He denied his guilt,
threatened suits for SANDER and as
sumed a virtuous Indignation.
When the other set of books was
shown to him, however, he wilted,
confessed the crime and pleaded for
mercy. AS he had been with the
house for long time he was permit
ted to resign, and l of course am
pledged to secrecy regarding his iden-
tity.
THAT case" said the accountant
in conclusion, "is but one of many
where a crime is hushed up, and,
he added, that wholesale house is
not the only one whose books have
been audited, nor do we expect to
terminate with it the auditing fea-
ture of our business. New York
Herald.