System of the right kind;

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HASKINS & S E L LS
CERTIFIED PUBLIC ACCOUNTANTS
BULLETIN EXECUTIVE OFFICES
HASKINS & SELLS BUILDING
37 WEST 39TH ST., NEW YORK
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MONTREAL
VOL. VIII NEW YORK, SEPTEMBER, 1925 No. 9
System of the Right Kind
GENERALITIES as such carry little
conviction. They may be pleasant or
unpleasant truths. They soothe or irritate
the individual consciousness according to
their character. They beget realization and
stir to action only as they are applied by
the individual to his own case.
That life insurance is a good thing, is
axiomatic. But it takes modern adver­tising,
picturing vividly the pitiful con­dition
of the surviving family, to bring a
man sharply to a realization that he has
not provided against the certainty of
death and to make him act in the premises.
Accounting system generally is acknowl­edged
to be vital to the successful conduct
of business. It is conceded to serve as a
safeguard against embezzlement and kin­dred
shortcomings. But few business
men really catch the significance of such
general statements, because the applica­tion
is not brought home to them in their
individual cases.
The ethics of the accountancy profes­sion
prohibit advertising such as is prac­ticed
so picturesquely and interestingly by
those engaged in trade. The accountant,
because of the nature of his occupation,
has no opportunity to show his wares,
as it were, or to sell his services through
the use of display advertising.
Yet the need for system as a preventive
of fraud is as necessary to the man engaged
in business as is insurance to the man who
would protect his family against want in
the event of his death.
System of the right kind makes it diffi­cult
for a dishonest employe to steal
money or other property from his employer.
System of the right kind makes it easy
to detect quickly, without professional
assistance from the outside, thefts of
money or property before they have as­sumed
alarming proportions.
System of the wrong kind and lack of
system make it impossible for the clever­est
certified public accountant to detect
stealings except at inordinate expense.
Where an employe handling cash is
permitted to use currency and checks
interchangeably, to make currency dis­bursements
out of receipts, to cash checks
for customers and others, and recash the
checks at the bank, to draw more than he
actually requires for payroll purposes, and
so on through a long list, the task of de­tecting
a shortage is arduous and expensive.
Where, for example, all receipts are de­posited
in bank daily, a fund is set aside
for petty disbursements, cashed checks
are deposited and the fund is reimbursed,
disbursements of substantial size are made
by check, and such precautions are ex­tended
to all the ramifications of financial
procedure, embezzlements rarely occur.
When they do occur, usually they are
nipped in the bud, so to speak, before
they grow to a size of importance.
A certain cashier, for some unaccount­able
reason, suddenly developed a streak
of dishonesty. In about fifteen days he
forged signatures on checks four times,