The Accountant in World Affairs.

BY THOMAS P. RYAN, C. P. A., NEW YORK.

According to my views the accountant has every reason to claim that his profession is the oldest brother to commerce, and hence has been a decided factor in the progress of civilized man from the first crude efforts at exchange and intercourse with his fellows to the present age of highly developed world trading. We may be sure that amongst the first of those so engaged and forming an important factor in the operations of the forerunners to the present captains of industry, there appeared one whose duty it was to calculate the values of commodities exchanged, and determine and assemble the interests involved. Here we had our first accountant. It is also fair to assume that the first lawyer, or his forerunner, did not appear until a dispute arose over some such adjustment, and therefore, the accountant was in the field of endeavor before the lawyer.

If men of the first ages of commerce were moved by the same motives as impel their present day descendants, we may be satisfied they gave more thought to "getting what was coming to them" in a financial dispute than to an adjustment of their bodily ills, and, therefore, the lawyer must have preceded the doctor. This being granted, who can successfully deny the accountant's claim that his is the oldest of the three professions, to which reference has been made?

Unquestionably the accountant through many ages, with the modesty which is such a noticeable characteristic of his at the present day, continued his labor of love for humanity by keeping the accounts straight and helping his fellow men to an equitable adjustment of their affairs, and maybe because of that same modest inclination to "hide his light under a bushel," we find little or no literature extolling his great virtues or laying down definite rules for future guidance, until some few hundred years ago. Then for the first time it apparently became advisable to give commerce, in an official way, some knowledge of the progress made in the science of accounts, and the result was the defining of what is now known as the double entry system. This method has been followed ever since, and is now generally recognized as the only correct way of keeping accounts; reducing the possibility

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of errors; affording a true means of verification and permitting the production of a showing of results and conditions with more certainty, equity and simplicity than by any other known means. Naturally, while retaining the principle, methods changed and improved as knowledge and commercial intercourse between mer and nations increased.

The importance of the accountant to the world of affairs from then on made progress and eventually attracted attention, because we find when the British Isles assumed control of world commerce, accountancy for the first time received from the law makers recognition as a learned profession, and as being worthy of the support and control resulting from such recognition. Thus constituted, the British accountant became recognized as the leader in matters requiring the attention of "one especially skilled in accounts," and there was demand for his services in every part of the commercial world, and nowhere more so than in our own country. Many of us here can recall when the American Public Accountants were "few and far between," and virtually confined to New York and some of the larger cities of the country.

Within the present generation, however, the United States has made more progress commercially than in all those preceding it, and the American Accountant, with his greater familiarity with the country and its needs, and his closer intimacy with the peculiarities of business methods found here (and methods peculiar to itself will be found in every country), became a necessity. Naturally this necessity was first recognized and provided for in the most highly developed centers, and, therefore, we find the State of New York to have been the first to recognize the new conditions and formulate laws granting certificates to those qualified, and providing penalties for infractions of the rules laid down to protect the certificate and the public in its dependence upon it. This action was followed by Illinois, Pennsylvania and many other states, and now a year seldom passes but we find other states taking similar action. There is every indication that the legislatures of the various states are ready to further dignify, improve and accentuate the accountant's usefulness as conditions will warrant.

Coincident with this recognition came a large increase in the number of men occupied in the practice of public accountancy, accompanied by an even greater increase in the demands of the

business world for the services of those qualified to serve its requirements. So rapidly have the changes taken place that it can now be said, with no desire or purpose to draw invidious comparisons, the American Public Accountant occupies almost the entire field and is meeting the requirements of the new situation with satisfaction to his clients and sufficient glory and other compensations to himself.

Any attempt to define the lines of activity of the public accountant would fail because, as a matter of fact, in our country he is occupied in almost every type of enterprise with which our people are identified. No up-to-date manufacturer is satisfied unless he knows positively the cost of his product and that the methods of keeping his business records are according to modern advanced thought; no merchant, unless he has statistics by which he knows constantly the effect of his trading. The promoters of new enterprises find the certificate of the reputable accountant an invaluable aid in securing investors. The banker is rapidly reaching the conclusion that the statement of conditions presented by the intending borrower has vastly increased weight if certified correct by a C. P. A. In all parts of the country wise and honest public officials are seeking the aid of the accountant in the examination of municipal accounts and in installing modern methods seeking greater accuracy and more reliable statistics necessary to an economical administration of public affairs. The major portion of the municipal accounting methods of our country were originally formulated by men more familiar with political conditions and their requirements than that of setting out statistical accounts, and no field in accountancy is more easy of improvement or more productive of reputation than that of our municipalities.

His intercourse with the various types of businesses and their necessities give him an unusual opportunity of becoming possessed of knowledge of the general financial conditions. We, therefore, find him not only engaged with the figures and accounts but also acting in an advisory capacity on financial problems, expansion, contraction and all of the numerous problems involved in the conduct of business and requiring prompt determination and speedy settlement of questions as they arise. The lawyer has been quick to recognize the value of the trained mind of the accountant and settles few problems of a financial nature involving a statement of accounts without consultation with his favorite public

accountant.

This is the age of the specialist, and the "jack of all trades" meets with little demand. No specialist is in more general use than the public accountant. If those engaged in active practice will hold themselves and their fellows to a true sense of their responsibilities the present demand for their services will be as nothing compared with that of the future.

These conditions produce responsibilities which can only be met by the profession's full recognition of its duty to the public. This duty does not merely consist of devotion to the individual piece of work in hand, but also of care that the ethics of the profession are carefully guarded; infractions upon the part of those within the fold followed by such punishment as can be inflicted; laws passed by which the public may be assured the certificate of the certified public accountant represents not merely merit on the part of the holder as an accountant, but that morally he may be relied upon to not only give his professional duties proper attention, but that his findings may be depended upon to represent truth and impartiality, and stated with no purpose beyond that of showing conditions as they exist.

In defining bookkeeping the British American Encyclopedia declares that there are three systems most generally followed, namely, single entry, double entry and mixed. I am inclined to believe it is lucky for the public accountant the mixed method is found so frequently. Naturally, like the medical man, he is largely dependent on the patient who from ignorance finds himself in trouble, and what can be more productive of trouble in accounts than a system which may be described as mixed? In all fairness, however, I must explain the encyclopedia goes on to state that the mixed method is a combination of double and single entry systems. The mixed accounts found by the accountant are sometimes in double entry, sometimes in single entry, and frequently of no entry at all.

Needless to say to possess ability to correct imperfect methods and install others capable of producing the desired results, the public accountant must be thoroughly grounded in the fundamental principles of accounts and accounting and their relation to the proper distribution of transactions connected with any specified business and the production of proper statements of ensuing results and conditions. He must be capable of installing systems and economical methods of accounting with a paramount care to

erect barriers against errors and defalcations-prevention of theft is more valuable to commerce than its detection-have at least sufficient knowledge of law to be able, in a general way, to determine the properties and requirements of co-partnerships and corporations and their settlements.

To deserve his place in this important arm of civilization the accountant must possess certain salient characteristics and they must be strongly developed. He must have the moral courage to declare his results without fear or favor; his judgment must be keen and his decision certain; he must be a judge of human nature and by tact avoid repelling those with whom he comes in contact, and thus generally succeed in obtaining the co-operation of even those whose methods he may later on find deserving of criticism; he must avoid all appearance of an assumption of superiority or profound wisdom, which not infrequently produces a discordant and repellent atmosphere that raises a barrier against otherwise willing assistance. His knowledge of his subject must be thorough and susceptible of demonstration; he must be absolutely just and without bias. He must so far as possible avoid personalities or criticism of individuals, deal with principles and facts as he finds them, and so far as possible retain the position of the historian. Yet when criticism is called for or improper conditions met he must be without fear and court no favor.

He must be devoted to the highest ethics of the professional man and at the same time possess a knowledge of business requirements, and when occasion arises be the bond between the law and commerce. He must be in a measure a combination of judge, lawyer, financier and business man, with a special aptitude for constructive work and analytical descriptions. He must restrain his imagination, be willing to deal with conditions as found, and by a happy combination of theory and practice produce methods suitable to meet the varying requirements of commerce in our rapidly changing civilization.

With the foregoing qualifications and ideals the public accountant becomes an important factor in our progress; is certain of large personal rewards both in reputation and financially and an invaluable aid to the municipalities of his country, thus helping to a better and more upright condition of citizenship in political life, and in commerce to a higher moral standard, and to more just and equitable conditions as between men.