AUDITORS' TOUGH

Evening Post, Volume CXL, Issue 54, 1 September 1945, Page 6

AUDITORS' TOUGH

TASKS

DUE TO WAR CONDITIONS

Interesting reviews of wartime auditing tasks were given by Messrs. F. H. Bass G. D. Stewart, and G. L. Allard at a recent meeting of the Wellington branch of the New Zealand Society of Accountants. "We have won a victory over our enemies; now we have to win a victory over conditions that have arisen durng the war," said the chairman, Mr. F H. Harris, in an introductory speech. "New Zealand is saddled with restrictions and major problems, of which we are well aware. She is something like Sinbad the Sailor and his Old Man of the Sea, seriously encumbered and unable to get free. Only by the greatest effort of all will the country emerge victorious." Mr. Harris said that one of the contingent problems, which was not so apparent as others were, was in auditors' responsibilities that might arise because of conditions that had obtained during the war. Many people, who were otherwise quite honest, had apparently little or no scruple when it came to questions such as petrol, tyres, rationed goods, and taxation. He referred to the practice of black marketing, tax evasions, and doubtful procedure covering sales tax. The effect of all this, he said, might have tended to change such persons' fundamental view of right and wrong. Furthermore, high rates of remuneration, false ideas of values, and all the attendant disabilities of an inflationary period had not helped in developing the proper outlook towards a stable existence. With the return to peacetime conditions many of those who had been in comparatively fortunate circumstances during the war, and whose commitments had been made on that basis, might find difficulty in carrying on. With the loosening of moral fibre these people might not consider that there were any reasons why their income should not be supplemented by methods not acceptable to an auditormethods which might lack nothing in originality and shrewdness. It was for this reason that auditors must more than ever fit themselves for the tasks before them.

NEED OF INTERNAL CHECKS

Mr. Bass quoted instances illustrating the necessity for having an effective internal check. He particularly emphasised the importance of seeing that care was taken in the custody of unused receipt books, the issue of duplicate receipts instead of receipting sttaements, and insistence upon employees taking regular holiday leave. He also referred to the importance of connecting up the issue of credit notes for goods purchased or returned with the actual receipt of the goods into store.

In a general survey of audit practice, Mr. Stewart gave his experiences in the form of illustrations to various points. He mentioned that most of an auditor's experiences were in connection with limited liability companies. Mr. Allard outlined various types of defalcation which could arise from the defeat of apparently good systems of internal check. Often the auditor was only able to disclose what was happening by going further than was normally contemplated in an audit. Mr. G. J. J. Feil, who moved a vote of thanks to the speakers, said he felt sure that all hearers had benefited from the very instructive treatment of the subject.