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The Green Bag

abandoned the prosecution of the Standard Oil Company and other socalled trusts, and it is rumored that it is President Taft's intention to alter the character of the Bureau of Corporations and reorganize it in connection with the Inter-state Commerce Commission and the Department of Justice, as he apparently recognizes the futility of obtaining results otherwise. Many states have recognized the necessity of creating a competent body of trained men, expert in economics, the science of accounts, commercial law and corporate organization, hence their legislatures have enacted laws regulating the practice of accountancy and providing for the granting of the degree of Certified Public Accountant (C.P.A.) to those having the requisite qualifications and passing the pre scribed examinations, thereby placing this profession upon the same plane as the practice of law and medicine. The state of New York enacted laws in 1896 regulating the accounting profession, many of the larger states having since done likewise. If Congress enacted legislation pro viding for the employment of the Certi fied Public Accountant, who is inde pendent of political parties and corrupt influences, by all corporations doing an interstate business (the corporation to pay the accountant's fees) and made such employment a part of the plan of reorganization of the Bureau of Cor porations in connection with the InterState Commerce Commission and the Department of Justice, absolute control of corporations doing an interstate business could be effectually secured with a minimum expense to the govern ment. Legislation along the following lines would be simple and efficacious, and an effectual check would be put on corpo

ration wrongdoing. Preventing viola tion of the law is better than prosecu tion :— First. Create and grant the degree of Federal Accountant (F. A.) to the Certified Public Accountant (C. P. A.) who has received this degree from his state, and after he is sworn to faithfully perform his duties as Federal Accountant issue a certificate to him. Second. All corporations doing an inter state business should be compelled to have their business investigated and accounts audited annually by the Federal Accountant, the corporation paying the Federal Accountant a fee commensurate with his services. Third. The proper governmental depart ment to prescribe the necessary form of the Federal Accountant's report, but it should consist generally of the following: (a) Text or comments on irregularities or unusual cir cumstances that may have occurred during the period under investigation and audit, also such explanations of various items as may be deemed necessary, together with sug gestions for the improvement of the account ing system, (b) Certified Genera^ Balance Sheet (Assets and Liabilities—Assets segre gated as follows, Invested Assets, Current Assets and Deferred Assets; Liabilities segre gated as follows, Capital or bonded debt, Current Liabilities, Deferred Liabilities, Sur plus and Reserves) all amounts where necessary being supported by schedules showing detail, (c) Certified Statement of Income and Profit and Loss; all amounts where necessary being supported by schedules showing detail. Fourth. One copy of the Federal Account ant's report to be filed with the proper gov ernmental department, and one or more copies with the corporation; the contents of all reports to be regarded by the governmental department as confidential unless it is shown that the corporation has violated the law, when it shall be the duty of the proper gov ernmental department to immediately begin suit against such corporation. Fifth. Federal Accountants wilfully cer tifying to a false General Balance Sheet or Statement of Income and Profit and Loss, or willfully making any false statements, shall be deemed guilty of having committed a crime, punishable by a fine of not less than One Thousand ($1,000.00) Dollars, and im prisonment for not less than one year at hard labor, and the forfeiture of their certificate as Federal Accountant.