CHURCHES

In the majority of cases the audit of church accounts is unsatisfactory to the auditor. One reason is that the church treasurer frequently is not only the custodian of all the church funds, but is tacitly empowered to disburse the same at will. There is usually a total lack of effective internal supervision. At times large sums pass through a treasurer's hands without any proper check being kept upon his dealings.

It is the auditor's duty to check whatever he can, and at the same time to urge upon his clients, judiciously but impressively, the necessity for ordinary commercial caution. He should see that all receipts are deposited in bank, and if a balance appears to be on hand that also should be deposited. This is preferable to an actual count of cash, as in the latter case the church official might exhibit his own funds without any intention of having them reach the church's bank account. A certificate from the bank direct to the auditor should be obtained, this certificate indicating the balance in bank belonging to the church at a stated time.

In some churches a collection register is kept in which are entered the collections as made, the aggregate amount subsequently being transferred to a cash book. The entries in the collection register should, if possible, be verified and initialed by some one other than the church treasurer. Special collections should be vouched for in a similar manner. Where pews are rented, the pew-rent register should be compared with the cash book. If special funds have been devised to the church, the securities held for such funds should be examined. Vouchers should be in evidence for all payments; these are to be compared with the minutes of that board or committee of the church whose duty it is to supervise its finances.

In at least one denomination the sentiment has been expressed that the accounts of a church whose treasurer handles moneys in excess of a stated amount annually should be audited by a Certified Public Accountant. When this sentiment becomes general we shall see a decided improvement in the manner of keeping church accounts, as well as added safety in the use and care of church funds.

CLUBS

In auditing clubs, particular attention should be given to the collection of income, and it will frequently be found that improvements can be made in this feature of their accounting systems. Since the members are the club's proprietors, their cooperation can usually be obtained, if necessary, in safeguarding the clubs from being defrauded by their employees or others.

Members should be requested to pay by cheque to the order of the club for all dues, house, restaurant, and other charges. Where peculations have occurred they have usually been from currency receipts, as the chance of detection is comparatively small if there is no adequate system of check on those handling the currency.

Consecutively numbered receipt forms, charge slips, and bills should be used wherever practicable, as the office copies thereof are valuable for auditing purposes.

The collection of dues can usually be verified by examination of the membership register. If necessary, the latter can, in turn, be verified by comparing it with the membership record at the close of the preceding audit and examining the minutes for names of new members and of those resigned, suspended, or expelled.

Wherever feasible, registers should be used as a basis for room charges. A good additional check thereon, which is valuable for auditing purposes, is to have the housekeeper make a daily record in a suitably ruled bound book of occupancies and vacancies of rentable rooms. Consecutively numbered daily reports to the office should form the basis of other house charges. Members' signatures are usually required on orders received in the restaurant and bar. In some clubs where it is the practice to return such orders to the members monthly upon payment of their accounts, duplicate orders are obtained by the use of carbon sheets. If these orders are filed chronologically, they may be used in connection with the verification of the deliveries from stock of wines and liquors. If members can be induced to use consecutively numbered ticket books, to be paid for either in advance or charged for in total, the bookkeeping will be entirely eliminated (in the first instance) or materially reduced (in the

second) from that necessary when each order must be charged to the personal account of some member.

There usually are, or ought to be, in hotels and clubs, miscellaneous receipts from the sale of bones, fat, and other like sources. The practice, which still exists in some clubs, of allowing the chef to retain the proceeds from the sale of kitchen refuse, should be discouraged, as the pay roll should show the entire compensation of all employees. Under the best of conditions it is difficult to be certain that all such receipts have been accounted for, and comparisons should be made of the receipts during the period audited with similar previous periods, and, in instances where no such receipts are recorded, investigation as to the disposal of the offal and scrap should be made.

Care should be taken to ascertain that proper allowance has been made for depreciation of china, glass, silverware, linen, and other furnishings. Either of two methods for doing this may be used: charge original cost of furnishings to asset accounts and all renewals to expense accounts, or reappraise the entire stock at least once annually. Many clubrooms are from time to time lavishly redecorated and refurnished, and it would be well, instead of charging the entire usually heavy costs of this nature to one year's operations, to distribute the expenditures equally over a period of several years.

It is important that all expenses be properly apportioned among the various activities of the club so that it may be definitely known whether those departments which are in the nature of business activities are in fact yielding sufficient revenue to defray all the expenses (including a proportion of the general expenses) properly chargeable to such activities. Otherwise it may be that departments which are supposed to be self-supporting, and which may on the face of the figures appear to be so, are, if all expenses chargeable thereto are taken into consideration, operating at a loss, which is being made up out of members' dues.

ARCHITECTS

The accounts of architects are not usually so voluminous as to preclude making a detailed audit. Owing to the fact that men who are professionally very able do not always have a keen busi