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auditor to disclose, the business of the examined to conceal. Railroad rebates are the most conspicuous instances. A single lapse from alertness may vitiate the entire examination, as when a defalcation is concealed by means of a fictitious account which the auditor passes in a moment of mental haze. Inattention sometimes produces a ludicrous result. In the audit of an insurance company, a schedule was prepared showing policies by numbers and amounts of insurance; the assistant who was making it footed not only the amount columns but also the numbers of the policies !

Memory is a faculty highly developed in the accountantmemory for conditions, men and figures. It is put to daily use in comparing new audits with former ones, in greeting by name men whom he has not seen since the prior year's examination and recalling traits and habits exhibited by them on that occasion, and in remembering combinations of figures whereby is furnished the soltuion of many a perplexing situation.

Closely akin to memory is the faculty of seeing the whole of a thing at a glance. Show to a layman an unfamiliar document, mortgage, contract, letter or deed—and for the first ten seconds one of two things will happen. Either he will begin the detail reading of some part of it, or the whole will appear a blur and the condition described by the psychologist as dispersed attention will result. To the trial lawyer, called upon hurriedly to scan before its admission his adversary's documentary evidence, at a time when ten seconds seem ten minutes, either alternative would be disastrous. His eye must be trained to see all the matter within its range, his brain to distinguish and record the impressions which come to it. Such training is the accountant's. The latter's whole work is the examination of strange situations and unfamiliar books and records, under stress of speed and the uncompromising necessity of absolute accuracy.

Of accuracy and speed, little need be said. The former is the rock upon which the confidence of the business world is built. A large employer of accountants once epitomized the matter in saying, “I do not want a fast man who is accurate, but an accurate man who is fast.” Speed is cultivated in the accountant chiefly because of competition among accounting firms, most of which conduct all their work upon per diem charges to the client. The same work completed in less time is the best advertisement for the accountant. Hence the men in the field are required to develop speed; also because they constitute the accounting firm's stock in trade and their percentage of their turnover must be as large as possible, since their salaries are on monthly bases. Incidentally it may be remarked that the accountant's punctuality in the lawyer would prevent many a default and some loss of substantive rights, while his precision and love of orderly arrangement would safeguard much evidence and reduce the loss of valuable papers to a negligible quantity. The office of the average lawyer displays a truly remarkable disregard for the value of the client's documentary evidence and for his own temper and time.

A well known governor of Massachusetts once said, “ Truth never lay in compromise." Granted, but practical results almost invariably do lie in compromise. A young lawyer inclined to be technical can profit greatly by accounting experience. The accountant is to produce a given result in a given time, an absolute physical impossibility if he is to thoroughly investigate every line of inquiry open to him and to rectify every error disclosed. Like a worker with an adze, he hews as close to the line as possible, but does not attempt to plane or to polish. Every bit of surplusage in work is cut away and matters handled incorrectly in theory are overlooked if relatively unimportant.

There is one phase of the accountant's work and the characteristics it develops which must be mentioned in closing or even so broad a generalization as this would be incomplete. This is the fact that most of the accountant's work is carried on in hostile surroundings. There is no court in which he can meet his adversary, no judge to grant him fair play. In most of the audits, the attitude of the examined is outwardly courteous, but in some, particularly where the local auditor or bookkeeper has been so long in his position that he regards himself as indispensable and the audit a personal affront, it is openly antagonistic. In either event, the examining auditor is put to an endurance test of resourcefulness, for whether or not the truth will be concealed depends solely upon his ability to discover the facts he seeks without material aid from the party under examination. Few questions may be asked, for, apart from the futility of asking them, they disclose the accountant's lack of knowledge of the situation and thus deprive him of the moral effect of his assumed expertness. He must exercise this resourcefulness to the straining point and the constant exercise of it makes of him a truly resourceful man.

The strained relations under which he works develop another faculty the value of which to the trial lawyer can not even be estimated—tact. And as to the results which the accountant discloses, he maintains a stoical reticence which is not to be scoffed at. This is carried even so far that at times when in a strange city he will affirm that he is traveling for pleasure rather than let the inference arise that he has been making an examination. And he holds inviolate the rule never to disclose the names of his clients. This is due to no peculiar consideration for the client but to his realization that confidence, which is the basis of credit, must never be disturbed by premature reports of his operations. Can the lawyer claim such discreetness?

These then are the benefits which the young lawyer may expect from the experience; what compensation must he render for them? Negatively, he must cease for the time his development as a practitioner, thereby losing his grip upon both his incipient clientele and the bag of tricks upon which the trial lawyer relies. The latter is easily re-acquired; the former will come again almost of itself on account of his added years and business experience. His knowledge of the great body of the law can be kept alive by his employing such spare time as he has in reading, and he will find a delightful avocation in what before seemed an endless struggle.

Affirmatively, he pays in work, genuinely hard and often health impairing. The mere preparation for the venture may mean a year or two in night school, for the ways of expert bookkeeping constitute the accountant's alphabet and positions as junior accountants are not open to men untrained in the technique. Then, when fairly launched, he will realize that never before did he know what work was. He will spend not hours but weeks in detail drudgery. He will know only one hour of the twenty-four —that at which he begins—and he will early fail to distinguish Sundays and holidays. What is perhaps harder, he must surrender his personal liberty and subject himself to a military system. The accountant is required to land on his feet and produce rough and ready results whenever and wherever he may be dropped. As the practice of the large accounting firms extends over the whole of the United States, he must travel and travel at short notice. Arriving at ten in the morning from Florida, he may leave at three in the afternoon for Chicago; or, having been led to believe that he would remain in his home city for some weeks, he may be notified by 'phone at eight in the evening to take the midnight train for Denver.

These hardships are offset in a measure by the fact that the junior accountant receives a larger salary than the law clerk. The latter ordinarily starts on his career at $10 or $12 per week-the junior accountant may expect $20 or $25. It should be borne in mind, however, that while the law clerk working in his library or answering calendar need not be fastidious in his dress, the junior accountant working as he does in the offices of the clients must present at all times an appearance of prosperity, a circumstance which substantially reduces the difference.

Finally, is it worth while? This question is so individual and so personal that it cannot be answered categorically.

Property Accounting for Fire Losses.*

Assistant Professor of Economics, University of Illinois.

A former article has shown the methods by which the insurance appraiser determines the loss of a fire from the books and records of the assured. The ordinary determination, according to the examination outlined previously, is merely a more or less inaccurate approximation, unless the records are kept according to a plan which will give absolutely definite data concerning the value of the materials within the structure. We have seen how desirable it is for both parties to have an accurate building and equipment inventory, and have seen how one may be put into operation. It remains for us to discuss inventory and record schemes for keeping track of all the materials that are in a plant, raw, finished and partly manufactured.

An adequate scheme should fulfill the following requirements: (1) Give a complete summary record of:

(a) Amount and value of raw materials in the storehouse. (b) Amount and value of finished goods in shipping

department or warerooms. (c) Amount and value of materials in each department

undergoing the manufacturing process. (d) The amount and value of the work that has been

expended on the goods in each department. (2) Give an accurate daily balance of the exact conditions

noted in number one above. (3) Be self-proving, so that the evidence presented by the

records will be absolutely trustworthy and acceptable. The valuable material in a plant at any time consists of three classes: raw products, partly manufactured, and finished goods. A very efficient plan for keeping track of goods within a plant is to adopt the perpetual inventory.

In this paper we shall discuss the perpetual inventory for the store room, keeping the raw material and the shipping room or warehouse, which receives and contains, until delivered to customers or otherwise disposed of, all the finished product, reserv* Copyright, 1908, by John C. Duncan.

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