The Practice of Accountancy

Dominion, Volume 28, Issue 99, 21 January 1935, Page 11

The Practice of Accountancy

Sir,—As one who has sought an understanding of the secrets of so-called scientific administration of business affairs, I enter this controversy for the purpose of helping the young men. An authority on the subject says; “The real function of all accounting work is to render a service to business management. The service lies in placing' before business executives the most complete information on their affairs, analysed aud interpreted so as to be readily understood and used effectively in guiding and controlling their operations and transactions more profitably, economically. . aud conservatively. The accounting services available to business are of two distinct types: (1) Services of public accountants; (2) services of the accounting officer or accounting department of a business organisation. The services of public accountants include audits of various types, investigations, system work, advisory and consulting services. The services most common to the average business man are audita and system work. ... The services of the industrial accountant attached to a business organisation are by far the more important. They are and should be the real accounting service to business management. . .. °What is the main object of the New Zealand Society of Accountants? lhe New Zealand Society of Accountants Act, 1908, (section 3 (2), states, inter eha: “(a) To promote in any manner in. whicli the members of the society think fit the interests of the profession of accountancy in New Zealand.” “(d) To control and regulate the practice of the profession or accountancy in New Zealand.” You will readily perceive that the New Zealand Society of Accountants views the subject from one viewpoint, and one only, that of the public accountant. Those seeking to become efficient industrial (business) accountants must study the subject from the viewpoint of business. Such understanding will not come from a study or the text books available in this country. rWith an internal knowledge of ■ business, study _ the subject from within the business itself, not by dwelling incessantly on those books prepared from the viewpoint of public accountancy; otherwise you will be merely peeping through the outside windows of an industrial organisation, and you will learn nothing of practical use to you. Accountancy is a part of business,, and it grows out of business. Good business practice always becomes good accounting practice. The subject of accounting may be divided into three branches: (1) constructive; (2) operative—recording— book-keeping; (3) inspective—analytical (auditing is a branch of this). As. regards the second branch, book-keeping: Firmly grip the principles underlying all account-keeping, and specialise in the accounts of the concern you are engaged in. If you are engaged in industry, it is a waste of time, and effort, to dwell on the surface of bank, insurance, or law accounts. An expert has been defined as one who knows more and more about less and lees. A “Jack of all trades” is, therefore, one who knows less and less about more and more. x The young man who adds to his practical experience of business accounting a thorough understanding of the principles underlying his work, will then be in a position to pass judgment on the extent of the service rendered by the public accountant. He will learn that “an ounce of practice is worth a ton of theory.”. Become a master of your own particular work: Then there will be little demand for outside services. A study of business administration (this will include a .study of business accounting), combined with practical work in an industrial organisation, will readily convince you that an auditor’s certificate is not worth the paper that it is written on. The first essential in any efficient audit is a thorough knowledge of the business; a knowledge of auditing is merely secondary. An auditor’s certificate is not final; it 's always given subject to the qualifications in his report. lie has to accept the manager’s certificate as regards the. inventory of merchandise, etc.; his certificate is on:y worth the word of the manager. This opportunity is readily grasped by rogues to cover their mismanagement of an organisation’s affairs. The shareholders are thus at the mercy of the management: they are not protected by an audit, but the rogues are protected by the weakness of man-made law, which, designed to benefit the few, becomes a burden to the many. The future repealing of man-made law will herald an ora of justice. Those engaged in industry are awakening to the fact that business to-day is being preyed upon by those who are supposed to be the servants of business. The servants are rapidly becoming the masters. In this country, if tbe servants have their own way, the future industrialist will require to have all his cheques countersigned by a member of the New Zealand Society of Accountants, and all his correspondence confirmed by a member of some Institute of Secretaries. . Of course, the necessary legislation will be passed in the interests of the business community. The next generation will be required to pass an examination, or purchase a license, before their birth is permitted! It is imperative for young men.to seek out that branch of knowledge which they can apply to their life’s work; they must master their own business, and mind their own business. They must not follow like sheep and accept, without question. all that this congregation of mighty intellects tells them. Briefly, they must learn to do their own thinking.—l am, N. J. BARTHOLOMEW. Feilding, January 14.