Principles of Auditing

and banks in particular. Creditors who have large accounts may be thought worthy of satisfaction through an audit. Likewise, it may be considered desirable to satisfy banks which have large amounts of commercial paper of any given concern, or banks which have applications for loans which it is desired they shall make. The position of any company or organization seeking credit is always very much stronger if the statements presented are supported by certificates of auditors. Following out the same idea there are frequently seen in the daily newspapers published reports of insurance companies which presumably are given out for the purpose of assuring policyholders that the business is being properly conducted and that the accounts have been audited and found correct. In all of the above cases the occasion for the audit arises at the instance of someone within the organization in an attempt to satisfy someone without. Third, at the instance of someone within the organization to prove or disprove some contention on the part of someone within. In this connection it may be noted that disputes have been known to arise among the officers as to the honesty, capability or efficiency of employes who have to do with the accounts. Almost any professional auditor of experience will recall disputes which have arisen between some of the officers on the one hand and a plant manager or superintendent on the other. The discussion usually consists of an argument as to whether c...