The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-08-27
THE GLOBES HOME STUDY
IN PRACTICAL BOOKKEEPING.
Course of Study in Single and Double Entry, EN-
bracing nercantiIe, Bank and Joint Stock Ac-
counts, With Treatise on Expert ACCOUNTING
and Professional Auditing.
BY THoS. DUGELBYI
ELEVENTH ARTICLE Auditor and A.d,+,.u
THE AUDITOR.
by THoS. DUGELBY. ]

An auditor in the general acceptation of the
term, is person appointed to audit or examine the
accounts of persons whom have been entrusted the
receipt and disbursement of money other property
Large corporations such as railroads manufac-
turing, mining and insurance companies usually en-
ploy an auditor permanently whose duty it Is to
periodically examine the accounts Of their different
officers agents at their various offices or plants
Auditors appointed by court are authorized to
take testimony to examine books or other vouchers
and In some states to examine witnesses under OATH
Such an auditor is an officer Of court during the
term of his service to state items debit and credit
between parties in suits when are in ques-
ton and exhibit balances. They receive special In
structions from the appointing them with which
they file their report. This report or statement Of
account is subject to examination for points of law
contained IN it. and when presented to the jury test
mony may be introduced to prove incorrectness
The directors stockholders of many corpora
lions appoint or elect an auditor to audit the &C.
counts of the company; sometimes a finance COM
mittee is appointed to approve and order paid all
bills and to examine and attest the correctness OF
the books, ETC.
QUALIFICATIONS.
An auditor must be expert accountant. 1t re.
qures very little practice and Knowledge of account
ing to keep ordinary books checking entries and
comparing disbursements with vouchers there is very
q
auditor much study and practice in the science Of
accounts are absolutely necessary. He must under
stand the principles Of the business he is auditing
for while the principles of accounting are always the
same their application in each line business varies
An auditor should be man of uncOmpromsing In
tegr1ty, OF good character, with will of iron; he
should know his duty, and do it without fear or
favor He must be discreet and capable of keeping
his own counsel minding his own business taking
no advantage of his position knowledge hastily
reaching conclusions He must stand in a neutral
position, retaining and maintaining every fact ac-
qured by virtue of his position a secret within
his breast for ever. car
An auditor when serving corporation Is the
representative Of the stockholders and it is his duty
to protect their interest and if fraud is discovered
to expose it. stating the facts as he finds them re-
CARELESS of whom 1t may affect whether the duty is
pleasant otherwise ava,
person interested, either directly or indrectlc
in a corporation should never be employed to audit
its books. ofr.
VALUE OF AN AUDIT
To test the accuracy of the accounts and the eff
fciency and integrity the accounting officers and
employees f..fy
To examine the records and see If the money paid
In by tie stockholders has been properly credited to
their accounts and passed into the treasury or busi
ness of the corporation.
10 ascertain IL the records show the true financial
condition of the plant.
To determine whether the business is conducted IN
accordance with the constitutional provisions ana
bylaws of the corporation.
To produce reliable and verified balance sheet or
statement of the corporations affairs
10 furnish evidence Of the safety and prosperity
of the corporation.
To protect corporations from the populations of
cliques and employees and to discover errors of fraud
If any.
REPORT
The report of the auditor consists of two state
ments. viz Loss and gain account and assets and
liabilities From these two reports the stockholders
VIII learn the condition of the business losses and
gains and It's assets and liabilities and understand
in what position the business stands as to its future
possibilities
The loss and gain statement will show in what
manner the loss and gain was made 1t embodies
the debit credit balances of all the speculative ac
counts the auditor reporting each particular balance
and its relation to this account
The statement of assets and liabilities shows all
resources or assets of every kind such as cash. real
estate leaseholds. mortgages LOANS securities In
Festments furniture, plant, machinery stock, mer-
chandise, accounts due bills receivable etc and all
liabilities that the corporation is liable for whether
to stockholders capital, loans individuals bonds etc
This statement must show the fair cash value Of
each resource and the amount of each liability
The auditor will take nothing for granted it is his
duty 10 make thorough, careful and full examlna-
uen ana he may refuse to certify to accounts pre-
sented FOR auditing for the reason that he does not
approve of same, and make special report of such
accounts.
The duties of the auditor cease when his report Is
read openly in stockholders meeting and he has