THE ACCOUNTANT AND THE FIRM

Press, Volume XCVI, Issue 28371, 2 September 1957, Page 15

THE ACCOUNTANT AND THE FIRM

Better Reports Urged "The Press” Special Service DUNEDIN, September L Many members ot the accountancy profession had given too little thought to proper reporting to their clients, suggested Mr R. G. Compton, of Christchurch, Dominion president of the New Zealand Society of Accountants, in an address to the Otago branch of the society.

“It is certainly my experience that a client will frequently think more of a report than of all our pretty balance-sheets,” said Mr Compton.

“I am afraid that perhaps because of lack of time, we tend to rush through a client’s accounts as quickly as possible, prepare the balance-sheet and tax return, and then we stop. “Of course, there are exceptions to every rule, but I suggest to you that to the client there is frequently more value in a final report than there is in all the rest of the work.”

It was not only the written reports rVhich they should consider, he said. “What about the accounts and the balance-sheet? In many cases we are using a stereotyped form which, while it might be adequate for accounting Stage I (at university), is not really giving the information to our clients in a way in which they can understand ’ it.” Narrative Form

Mr Compton suggested that the accountants consider this when next they were preparing a set of accounts.

“What about trying the narrative form?” he asked. “I know of one firm which has completely eliminated the formal balancesheet from the accounts which they prepare for trust estates. In its place they use two statements called ‘Statements of Funds’—one fdr income and the other for capital. “This may or may not be a good idea., but the point I wish to make is that we are not tied to the formal balance-sheet. We must use imagination and present the figures In the best way possible.

“Obviously we cannot turn an established system upside down in one glorious effort, but we can make suggestions which should improve a part of a sysand having proved ourselves in one or two directions it will not be long before our opinions are sought in others, and I trust suitably rewarded. A few points on which the accountant could offer suggestions were:

(1) Improvement in the measurement of results. (2) Improvement in the speed of reporting results. (3) Budgetary control of production, etc., and the reporting of variations from budget and plan. (4) Elimination of unnecessary figures from existing reports.