Piercing the cloak of secrecy;

              ATLANTA
BALTIMORE
BIRMINGHAM HASKINS & SELLS PHILADELPHIA
PITTSBURGH
PORTLAND
BOSTON
CERTIFIED PUBLIC ACCOUNTANTS
PROVIDENCE
BUFFALO SAINT LOUIS
CHICAGO SALT LAKE CITY
CINCINNATI SAN DIEGO
CLEVELAND BULLETIN SAN FRANCISCO
DALLAS SEATTLE
DENVER TULSA
DETROIT WATERTOWN
KANSAS CITY LOS ANGELES MINNEAPOLIS HAVANA
NEWARK LONDON
NEW ORLEANS EXECUTIVE OFFICES PARIS
NEW YORK HASKINS & SELLS BUILDING
37 WEST 39TH ST., NEW YORK SHANGHAI
VOL. VII NEW YORK, NOVEMBER, 1924 No. 11
FOUR out of five persons who handle
funds belonging to others may be
tempted at one time or another, without
yielding, to appropriate illegitimately to
their own use, a part of such funds. The
fifth may be tempted and fall, thereby en­rolling
in what has come to be recognized
as a rapidly growing class of undesirable
citizens known as embezzlers. The four
may be prevented from lapse, by strength
of sterling character, or by fear. The fifth,
encouraged by opportunity, driven by
need, prompted by the lure of speculation,
the demands of extravagant living, or
otherwise motivated, takes the chance,
foolishly hoping to hide his misdoings under
the cloak of secrecy.
"Embezzle" is an exceedingly specific
term. It means to appropriate or divert
fraudulently to one's own use, money,
securities, goods, or other values intrusted
to one's care; to apply to one's use in
breach of trust. The principal synonym of
embezzle is "steal," a short, pointed Anglo-
Saxon word, easily understood in case there
may be any doubt as to the meaning of the
companion term.
The perpetration of embezzlement takes
various forms. One type of embezzler lifts
cash out of the drawer; another intercepts
incoming receipts; a third resorts to im­proper
withdrawal of funds on deposit.
Then there are those who appropriate
owned, collateral, or safe-keeping securi­ties,
negotiating them outright or using
them in connection with borrowings or
speculation. The list is too long to enu­merate,
but statistics show the foregoing to
constitute the main types.
Concealment often is ingenious and at
times diabolically clever. Manipulation
of the records, disorderly condition of the
accounts, forged endorsements on checks,
alteration of bank statements, and shifted
securities are the means most frequently
used for purposes of coverage. The treas­urer
of a well-known company concealed
misappropriations of several thousand dol­lars
by depositing in bank without entry
in the cash book checks received for sales
of by-products, subsequently withdrawing
the corresponding funds from bank on
checks to his own order not entered in the
company's records. Quite naturally he
destroyed the checks after they had been
returned by the bank, but the trail in the
bank was too apparent to escape detection.
The increasing wave of embezzlements
calls for concerted action on the part of
various agencies related to the question of
fiduciary integrity in employes. Surety
companies obviously are vitally interested
and are spending their money freely in
carrying on a campaign of education. But
Piercing the Cloak of Secrecy