ACCOUNTANT STUDENTS' SOCIETY

Colonist, Volume LIV, Issue 13480, 27 July 1912, Page 2

ACCOUNTANT STUDENTS' SOCIETY

FORTNIGHTLY MEETING

The usual fortnightly meeting of the Nolsou i Accountant Students' iSoicety was held at tno uhamboi- ol Commerce rooms on j Jiursday ovenmg, when there was a good attendance of members, Mr. J( J. Ji. liiomsou presiding. The evening was devoted to nfteon minute papers. .\

. Mr. H. Craoknell opened- with a careiuJly prepared paper on "I'rivato Oompaiiies/' He dealt exhaustively with tiieir .formation, and clearly outlined the difference between a public and aprivate company. He explained that whilst a public company issued a. prospectus inviting subscriptions, a private company could not adopt this course A public company could have a membership of any numjoer of members exceeding seven; whilst a private company must not have a membership exceeding 25, and must not bo less than two He explained that a number of the provisioi/s or the Companies Act applying to public companies ciid not affect private companies, via., the following sections • iho Jaw vrelatmg to the transfer of shares on winch calls are unpaid • directors' qualifications ; payment of calls • and directors' fees; the provisions in regard to y the statutory meeting ;the"allot-ment-of shares; the section relating to the commencement and carrying on of th» business. The winding up o f a private company was next: explained • and the paper-concluded with explanations ■ regarding a public company being formed into a private company. • Mr. J. Griffin followed with an interesting. aJid instructive pauor on "Internal Check." The phrase "internal check indicated some system, of organisation aiming to secure as far as possible—(J.) accuracy of records contained in all books, including those outside the double entry; (2) correctness of the book-keeping; speedy detection of fraud, and thus prevention, of fraud. Fraud under a sound system of internal check can only come about by collusion between two or more members of the staff. The two points of view from which tho necessity of a sound system of internal check may be. regarded viz., from tho point of view of the business, and from the point of view of the auditor, were clearly explained. Internal checks could be ctassified into three distinct groups; physical, mechanical, and intellectual; the latter being the most important from the point of view of the scienco of accounting. No one definite system of internal check can be laid'down as applying, to all business, but the system must vary according to the size and nature of the business. A general outline was given of tho Win principles of internal check as regards cash receipts and payments, purchases, sales and costs accounts. In. conclusion, it was pointed out that no system 'can ever remain sound unless it is constantly subjected to severe scrutiny, and, where necessary, adjusted to meet the present day needs. Mr. B. Neale followed with a paper on 'The Advantages and Disadvantages of the Company Form of Trading." The first and most important advantage was that of the limitation of the liability of members. This liability was clearly explained in comparison to the unlimited liability of members of a partnershio. The second advantage was that it secured t?»o continuity of the It'was clearly explained how death, bankruptcy, or lunacy of a partner ended the partnership; but it could no€ prevent a company from pursuing the even tenor of its way. The third advantage was tho convenience with which one rs interest tn a cc&pany could be transferred, in contrast with tho im-ossibfity of transferring one's interest into partnership. The fourth advantage was explained as the ease and effectiveness with which the powers and authorities of the directors may be limited, and this was a very important consideration from the standpoint of the .remote members. The fifth advantage was that to a certain extent tho borrowing powers of a firm were facilitated by its formation into a company. The disadvantages were next explained, the most important of them being— (1) The publicity involved by the necessity of complying with tho restrictions of the Companies Act; (2) the necessary cost, viz., printing of memorandum articles and prospectus, legal expenses, and registration fees ; (3) the necessity of filing returns with registrar.

Mr R. C. Gilbert should have si yon a paper on "Bills of Exchange," but was unavoidably •• absent owm' r to business

s-equii'eTnonts. The paper will be- given ::t sime sußsequent mating.

The rest of the evening wns devoted to an interesting discussion o.f vnrimis accountancy subjects among the members -present

A vote of th finks to tlm rronfVmnn the papers, anr! to tb*> chnirrnnn, n. most ihterestipg an<l sncrws'afnl Tneetihs.

TuT Ausxis^fc £+h ,i Torture on 'Thmnrmy Law" will be given by Mr. J. Houlker, LL.B.