Accountant's responsibility for disclosing bribery: An historical note

              R. P. Brief
PROFESSOR OF BUSINESS STATISTICS AND ACCOUNTING NEW YORK UNIVERSITY
THE ACCOUNTANT'S RESPONSIBILITY FOR DISCLOSING BRIBERY: AN HISTORICAL NOTE
Abstract: In the late nineteenth century The Accountant reported on a case where the auditors looked at the mattery of bribery "straight in the face" and disclosed the illegal payments in the audit certificate. However, subsequent discussion of the accountant's responsibility for disclosing bribery in an 1899 lecture, "Secret Prof-its," showed that there was no unanimity of opinion on the accountant's responsi-bility in this area. The problem is obviously a continuing one.
Recent scandals involving political payoffs and international brib-ery have raised questions concerning the accountant's responsibility for disclosing illegal payments. These questions are not a recent phenomena. Since the dawn of civilization, accountants have been confronted with this fundamental problem of human nature.
Long ago Aristophanes (450-385 B.C.), in his comedy "The Clouds," attacked Pericles for financial statements in which an item of ten talents was shown as "expended for necessary purposes." Apparently, the payment "had been allowed by the auditors because the sum was known to have been used for a bribe to a person with connections in high places."1
Skipping quickly through several thousand years of history, to the early industrial age, a less passive approach was taken by the audi-tors of Bell's Asbestos Company, Limited, in 1890. Their action was reported in a note on "Tips" that appeared in the March 8, 1890 issue of The Accountant.
A limited company has obtained great notoriety recently in connection with its reprehensible practice of tipping. The auditors looked the matter straight in the face, when, after passing the accounts, they appended to them the following certificate. "We have examined the above balance sheet with the books, accounts, and vouchers of the company, and certify the same to be correct, subject to the non-