Value of unannounced examinations;

              50 H A S K I N S & SELLS July
Value of Unannounced Examinations
THE morning papers recently displayed
on the front pages an account of a
bank clerk who had in a brief space of time
stolen over $100,000 of the bank's funds.
His job was to keep the depositors' ledger
and charge against the individual credit
balances checks which came back from the
Clearing House after having been issued
by the depositors.
His scheme of perpetrating the theft was
to open accounts under fictitious names in
other banks; issue forged checks against
depositors' accounts in his own bank;
deposit the checks in the fictitious-name
accounts in the other banks; and when the
checks came back through the Clearing
House, his bank having been charged,
tear them up. The money was then drawn
out of the fictitious-name accounts. The
total of his individual ledger trial balance
was reduced by him in the amount of the
forged checks whenever he had occasion to
report his balance to the general ledger
bookkeeper. It thus appeared to be in
agreement with the control. And every­thing
apparently was well.
But one morning the young man failed
to appear. Some of the forged checks
came back and were detected as forgeries.
The shortage was discovered. But it
might have gone on for some time if illness
or fear, or whatever it was that overtook
the bank clerk, had not kept him away
from his desk. Had he known of a forth­coming
examination, with sufficient time he
might have so adjusted his individual depos­itors'
accounts that they would have pro­duced
a trial balance in perfect agreement.