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A description and examination of a type of professional training in the light of educational psychology Cross, Henry Norman 1935

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A DESCRIPTION AND E X M i l N A T T o f ' ' ^ ^ " ^ ' ^ " ^ ' ' " OF A TYPE. OF PROFESSIONAL TRAINING IN THE LIGHT OF EDUCATIONAL PSYCHOLOGY by Henry Norman Cross A Thesis submitted f o r the Degree of MASTER OF ARTS i n tjae Department PHILOSOPHY The U n i v e r s i t y of B r i t i s h Columbia FEBRUARY 1955 TABLE .OF CONTENTS Page I I n t r o d u c t i o n . I I I Checking of C a l c u l a t i o n s and Achievement of F a m i l i a r i t y w i t h Various Forms and Records . 1 L)i s ens s i o n • • « • • « * * « • • * • • • • 3 I I I Learning the V e r i f i c a t i o n of Cash and Bank JD I S C*O. s s 1 on » • • « • * • s * « • • • • • *H IV The Learning of Vouching 8 D1 s L. ui s s i on • • « « • . • « • 9 • # * • • « » • » 9' V Learning the V e r i f i c a t i o n of Inventories . . . 11 Di s ens s 1 on • « • • • • • - • • • • « » • o • « • 1 3 VI Learning the V e r i f i c a t i o n of Accounts and Notes Receivable . . . . . . . . . 15 Di senssion » • m • • • • * * • •» • • • » • • • * • 18 VII Learning the P r e p a r a t i o n of Schedules of Accrued and Prepaid Items . . . . . . . . . 20 Di scuts s ion. » * « « # • • « « • « « • V I I I Learning the V e r i f i c a t i o n of Accounts and Notes Payable and Outstanding L i a b i l i t i e s . . 24 Di s cms s 1 on • • • » « • IX r The Learning of Posting 28 Discussion 29 Page X Learning the A n a l y s i s of C a p i t a l Asset Accounts . 51 Discussion 52 XI Learning the V e r i f i c a t i o n of Share C a p i t a l and Examination of Minute Books 54 Discussion 55 XII D e s c r i p t i o n and Discussion of the Learning of A n a l y s i s of P r o f i t and Loss Accounts. . . 57 X I I I D e s c r i p t i o n and D i s c u s s i o n of Method of Learning to Carry Out a Complete Audit . . . 45 XIV General Discussion of the Learning of D e t a i l V e r i f i c a t i o n . . 50 XV General Discussion of the Learning of More Advanced Work Leading up to the Completion of an Audit 70 XVI Conclusion . 78 A DESCRIPTION AND EXAMINATION OF A TYPE OF PROFESSIONAL TRAINING IN THE LIGHT OF EDUCATIONAL PSYCHOLOGY I INTRODUCTION The a p p l i c a t i o n of s c i e n t i f i c p r i n c i p l e s of t r a i n i n g i n the f i e l d of accounting i s l i m i t e d by the absence of a knowledge of these p r i n c i p l e s and by p r a c t i c a l f a c t o r s . The senior accountant who i s acquaint-ed w i t h the p r i n c i p l e s of pedagogy i s an exception. The pressure of time and other conditions a f f e c t i n g the work would always act as an impediment i n the way of an endeavour t o a s c e r t a i n and apply more c o r r e c t methods. The very nature of p r o f e s s i o n a l accounting makes the l e a r n i n g of i t systematic. I t should be understood, however, that t h i s l e a r n i n g i s not n e c e s s a r i l y based upon any conscious or preconceived p s y c h o l o g i c a l p r i n c i p l e s . The t r a i n i n g can be s a i d to be i n keeping w i t h science i n so f a r as those methods that have been developed by the p r a c t i c a l a p p l i c a t i o n of common sense, resemble the r e -f i n e d judgements of the s c i e n t i s t , as they f r e q u e n t l y do. The d e s c r i p t i v e part of t h i s ?rork i s w r i t t e n from a p s y c h o l o g i c a l point of view. There appears to be' no t e x t d e a l i n g w i t h the t r a i n i n g of the beginner i n accounting i n t h i s manner. The accounting t e x t t r e a t s I I •idie-subject from a general point of view, concerning i t s e l f w i t h t h a t which should be done t o s a t i s f y c e r t a i n l e g a l and other requirements.. The d e s c r i p t i o n In these pages dea l s • w i t h a s p e c i f i c form and method of t r a i n i n g . A. p s y c h o l o g i c a l d i s c u s s i o n of the way i n which a subject i s learned must i n v o l v e a d e s c r i p t i o n , i n some sense, of that subject. The t e x t oh educational psychology showing ho?/ a r i t h m e t i c i s learned, may s t a t e and describe the problems of a r i t h m e t i c but concerns i t s e l f p r i m a r i l y w i t h the l e a r n i n g process. I t may only he considered a psycho-l o g i c a l t r e a t i s e . ' The study of any type of l e a r n i n g : i s the study of\the a c q u i s i t i o n of new ways of r e a c t i n g . The important parts of the process are governed by the laws of l e a r n i n g . Each law emphasizes a p a r t i c u l a r part of.the process. The ex e r c i s e by use of any mental r e a c t i o n tends to strengthen i t . T h i s , simply, i s - t h e law of use. From i t f o l l o w s ; t h e law of frequency, which s t a t e s ; the more frequent the exercise of a r e a c t i o n the stronger i t becomes. The converse i s e q u a l l y true and i s r e f e r r e d to as the law of disuse. The law of recency st a t e s that the more recent the exercise the stronger w i l l . b e the r e a c t i o n . A l l of these laws are subject to the p r o v i s i o n that other factors; remain unchanged. In f a e t these other f a c t o r s r a r e l y do so. They d i f f e r i n t h e i r q u a l i t y and, according-l y , the lav; of e f f e c t i s introduced which s t a t e s that i n .human behaviour much*depends on the sense of s a t i s f a c t i o n or atmoyance- which accompanies an act or I t s r e s u l t . 'There i s an abundance of p s y c h o l o g i c a l evidence to show that a subject must be "over-learned" i f the d e s i r e d to to .be r e t a i n e d . Many experiments have been made to show the extent, t o which we f o r g e t what we l e a r n . I t i s e s s e n t i a l that a subject.should be s u f f i c i e n t l y : learned before the l e a r n e r i s t r a n s f e r r e d to some other subject. • These laws appear; to be almost s e l f - e v i d e n t . They i n c l u d e the cumulative r e s u l t of centuries of s c i e n t i f i c study and, simple though they may appear, i t i s p o s s i b l e to observe t h e i r : v i o l a t i o n ?/herever we see the t r a i n i n g of i n d i v i d u a l s c a r r i e d -put" .without t h e i r study and a p p l i c a t i o n . The mind i s always a c t i v e i n the a c q u i s i t i o n of knowledge. Ah attempt at. t r a i n i n g i n any f i e l d w i l l be s e r i o u s l y handicapped, by f a i l u r e to recognize t h i s b a s i c f a c t of human l e a r n i n g . The theory that the mind i s a. tabula rasa on which ideas are p a s s i v e l y impressed, as was. taught by the e a r l y 'psychologists such as Bp eke and Hume and the a s s o c i a t i o n i s t s and i m p r e s s i o n i s t s that f o l l o w e d , has long been d i s c r e d i t e d . The b e l i e f that ideas are p a s s i v e l y received i s s t i l l ; p o p u l a r l y h e l d , however, and a f f e c t s the t r a i n i n g of .individuals under a l l circum-stances where theadvances of -modern psychology are not Known.:.-"'Where, In the past, emphasis re s t e d w i t h the teacher i t i s how placed on the l e a r n e r . The object of the teacher used to be to "impress" ideas on the mind of the l e a r n e r . I t i s now to d i r e c t , him i n such a manner that h i s mind may be as a c t i v e as p o s s i b l e I n the accumu-l a t i o n of h i s -knowledges A l e a r n i n g s i t u a t i o n i s looked upon as being i n the nature of a problem, wherein the l e a r n e r ...must exercise h i s mind t o o b t a i n the most econom-i c a l and e f f e c t i v e method of s o l u t i o n . The whole of a • s i t u a t i o n , however l a r g e or small,; f i r s t presents i t s e l f vaguely to the mind w i t h c e r t a i n dominant features which i n d i c a t e i t s meaning". The mind tends to analyse, f i l l i n , and r e l a t e the d e t a i l to the meaning as a whole. In doing t h i s the mind analyses and synthesizes concurrently and i n t e r - a c t i v e l y at a l l t i m e s . The i n d i v i d u a l should be t r a i n e d to t h i n k ' ' along the course the mind n a t u r a l l y takes i f the most d e s i r a b l e r e s u l t s are to be obtained. Learning may be made d i f f i c u l t i f the normal -flow, of t h i n k i n g Is impeded or improperly d i r e c t e d . An e f f i c i e n t d i r e c t i o n would be t h a t which applied,: as f a r as p o s s i b l e , a s c i e n t i f i c : knowledge of the laws of l e a r n i n g and aimed at guiding the l e a r n e r in. su.ch a manner:, that he would t h i n k f o r him-, s e l f as much as p o s s i b l e . He would acquire new f a c t s i n a l o g i c a l and connected manner. Each part would be -V -r e l a t e d to a l l other parts and t h i s sense of r e l a t i o n s h i p would a c t i v e l y d i r e c t h i s mind i n the s o l u t i o n of any problem. The f o l l o w i n g hypothesis w i l l be found u s e f u l i n the examination of the t r a i n i n g that i s to be o u t l i n e d . Three methods of l e a r n i n g w i l l be recognized. The f i r s t i s the t r i a l and e r r o r method, which i s looked upon as the most elementary and which i m p l i e s no r e f l e c t i v e t h i n k i n g or a n a l y s i s , but c o n s i s t s of random movements w i t h the object of reaching a goal. The second I s the method ' r e f e r r e d to as i m i t a t i o n - the observation of that -which others do enables the l e a r n e r to acquire a store of knoY/ledge without the process of d i s c o v e r i n g f o r himse l f , at the time, the importance of each i n d i v i d u a l p a r t . The t h i r d way of l e a r n i n g Is by r e f l e c t i v e thought. This method Involves a consciousness of the problem as a whole, the o b j e c t i v e s and the r e l a t i o n s h i p of the parts to each other and to the whole. This t h r e e f o l d d i s t i n c t i o n i s , however, u s e f u l rather than f i n a l , since t r i a l and e r r o r l e a r n i n g i s apparent throughout the whole range of our t h i n k i n g . An attempt w i l l be made to show that these three methods are present i n varying degrees i n the l e a r n -ing that i s to be examined - that though no one method may he present to the e x c l u s i o n of the others,, one may be - VI -,the more prominent. P s y c h o l o g i s t s agree g e n e r a l l y that /the l a s t i s most e f f e c t i v e . An attempt should be made, 'therefore) to r a i s e ^he l e v e l wherever p o s s i b l e from l e a r n i n g by t r i a l and e r r o r , or by i m i t a t i o n , to a c t i v i t y i n which the higher processes of the mind are involved.. Moreover, reasoning i s the form of l e a r n i n g that i s p a r t i c u l a r l y adaptable i n the f i e l d of accounting, Psychology has achieved an understanding of the processes pf reasoning, a knowledge of which, i s e s s e n t i a l i f t r a i n -ing i s to be c a r r i e d out c o r r e c t l y and e f f e c t i v e l y . In reasonings the mind Is operating along i t s normal course. I t continues to analyse and synthesize, but i n a. more • purposive, r e f i n e d and complex manner. Instead of having ,a, vague p i c t u r e , of. a. s i t u a t i o n , we may have a plan or a hypothesis or a problem w i t h c e r t a i n defined paths of ^procedure towards, s o l u t i o n . This, i m p l i e s the r e c o g n i t i o n of r e l a t i o n s between the elements', and a combination of them i n the course of observing them. In reasoning, con-sciousness or awareness of the problem or plan as a wrhole i s e s s e n t i a l , i f the parts are to be examined as to t h e i r • r e l a t i o n to i t and to each other, f o r there obviously must be the r e c o g n i t i o n : o f appropriate means to the end. , In the s o l u t i o n of any problem or the con-s t r u c t i o n of any hypothesis, not only does the mind use , the f a c t s of present observation; i t a l s o draws from the storehouse of memory any experience that r e l a t e s i t s e l f . - VII -To f a c i l i t a t e t h i s l a t t e r a c t i v i t y , the m a t e r i a l stored i n the mind should be i n a form to permit s e l e c t i o n and r a p i d review f o r the purposes of s e l e c t i v e thought. I f the r e l a t i o n s h i p between ideas i s c l e a r l y recognized, each step i n the l e a r n i n g process w i l l l e a d e a s i l y and i n e v i t a b l y to the next. Moreover, the abridgement of t r i a l and e r r o r l e a r n i n g i s g r e a t l y f a c i l i t a t e d by the prevention and c o r r e c t i o n of e r r o r s . Through a knowledge of mistakes the l e a r n e r may see the consequences of h i s acts or get a b e t t e r understanding of what i s r e q u i r e d of him. E r r o r s should be Drought to. the n o t i c e of the l e a r n e r wherever p o s s i b l e , i f they are to be subsequently prevented or c o r r e c t e d . Unless e r r o r s are known, the l e a r n e r may carry on a t some performance I n d e f i n i t e l y w i t h l i t t l e or no improvement. I t i s p o s s i b l e f o r an i n -c o r r e c t mode of procedure to become habituated, i f i t i s not corrected at the outset. Where a knowledge of mistakes Is before the mind, the s e l e c t i v e processes are f a c i l i t a t e d , and the l e a r n e r i s enabled to f i n d h i s way more r e a d i l y to h i s o b j e c t i v e . T r a i n i n g methods may be improved s c i e n t i f i c a l l y i f the mind i s developed i n accordance w i t h the laws of l e a r n i n g , w i t h f u l l r e c o g n i t i o n of the a c t i v e nature of the mind. Random and i m i t a t i v e t h i n k i n g should be replaced as f a r as p o s s i b l e by reasoning. To do t h i s a plan and under-- V I I I standing of the purposes i m p l i c i t i n i t should be sub-s t i t u t e d f o r the vague o u t l i n e that i s formed at f i r s t i n the mind,-- The obstacles that may present themselves should be c l e a r l y i n d i c a t e d , and the means supplied by which shorter and be t t e r paths may be recognized and s e l e c t e d . - 1 -'Checking of C a l c u l a t i o n s and Achievement of  F a m i l i a r i t y w i t h Various Forms and Records The checking of c a l c u l a t i o n s i s u s u a l l y the f i r s t work to which a gunior accountant i s assigned. In the checking of a d d i t i o n s h e - i s given d e f i n i t e I n s t r u c t i o n s a s t o ..what columns i n the hook or statement he i s r e q u i r e d to ?check. • There are, of course, many d i f f e r e n t places where the checking i s necessary, but he i s c a r e f t i l l y ' d i r e c t e d ; and the only knowledge r e q u i r e d of him i s the a b i l i t y to add. , This checking of a d d i t i o n s i s a very important l i n k In the reasoning that -leads to the consum-mation of the t o t a l v e r i f i c a t i o n work th a t i s being c a r r i e d out* The j u n i o r at t h i s stage has no idea as to, what t h i s may be. Each step he makes i s under c a r e f u l observation. He i s i n s t r u c t e d to mark whatever he checks w i t h a d i s t i n c t i v e mark, so that the gaps i n h i s work may be subsequently discovered and completed. For example^ when the t o t a l s are c a r r i e d forward from one page to another, i f these are not marked and checked, the work that he has been doing on.additions Is of l i t t l e value. He w i l l ; a l s o be given work to do on extensions, that i s , the v e r i f i c a t i o n of m u l t i p l i c a t i o n wherever i t appears on the data that are submitted to him, the most frequent of which are, i n v e n t o r i e s . Here again, the amount of work he i s to do Is d e f i n i t e l y ; i n d i c a t e d , ;'ani'he'will show what has been done by. marking. -.• . . .The e a r l y part of the t r a i n i n g i s ^confined to work of t h i s nature. No t e c h n i c a l knowledge i s necessary, but the student/acquires a f a m i l i a r i t y w i t h forms of, which he w i l l see a great de a l l a t e r . He w i l l be given inventory sheets ;on which are shownj a d e s c r i p t i o n of the a r t i c l e , the q u a n t i t y , the u n i t p r i c e and the t o t a l amount.. Under the heading of q u a n t i t y w i l l be shown the number of u n i t s of weight, count.or measurement used, e.g., pounds, f e e t , g a l l o n s , e t c . The u n i t p r i c e s w i l l be shown i n terms of p r i c e s f o r the p a r t i c u l a r weight or measurement i n which the q u a n t i t i e s have been shovm. The' t o t a l amount w i l l be the r e s u l t obtained by m u l t i p l y i n g the q u a n t i t y by the u n i t p r i c e . I t . i s found necessary, q u i t e o f t e n , to con-v e r t the q u a n t i t y given i n t o some other u n i t , , such as evrb., or gro ;ss, before the computation can be made. In doing, t h i s the senior cannot be bothered too o f t e n . The student.must appeal to whoever i s r e s p o n s i b l e f o r the compilation of•'••.-the i n v e n t o r i e s . He cannot a f f o r d to ask questions before having t r i e d t o reason the problem out f o r h i m s e l f , as he may be accused of asking absurd questions. In t h i s way he gradually acquires i n f o r m a t i o n that he uses i n doing,work of. a s i m i l a r nature where, s i m i l a r u n i t s and v a r i a t i o n s are found. ^ He w i l l have been given the opportunity to observe various c l a s s e s of records, cash, books, purchase j o u r n a l s , sales j o u r n a l s and r e g i s t e r s of d i f f e r e n t d e s c r i p t i o n s , a l s o various types of l i s t s and summaries. These w i l l be d i f f e r e n t everywhere he goes, so that he becomes accustomed to the f a c t that a l l systems are d i f f e r e n t , however much the u n d e r l y i n g p r i n c i p l e s are the same. Discussion In the l e a r n i n g of the work on a d d i t i o n s , as such, l i t t l e new knowledge i s obtained. The l e a r n i n g of the work on extensions could be considerably f a c i l i t a t e d i f the j u n i o r were given the same types of work to do c o n s e c u t i v e l y , u n t i l i t became f a m i l i a r . T h i s , however, i s not always p o s s i b l e , as no s i m i l a r type of work may be a v a i l a b l e f o r h i s next assignment. He may f i n d h imself working on a d d i t i o n s again. This i s not so true of t h i s e a r l y simple c l a s s of work, as there i s a great d e a l of i t and he w i l l do enough to become accustomed to the p o s s i b l e v a r i a t i o n s ; as :.the work becomes more complex, the l i k e l i h o o d of continued p r a c t i c e upon s i m i l a r kinds of work i s lessened. The l e a r n i n g could be f a c i l i t a t e d i f , on the completion of h i s assignment, comparisons were made wi t h other sets of working papers, showing work s i m i l a r to what he has been doing and g i v i n g explanations such _ 4 -as we s h a l l show l a t e r . In developing f a m i l i a r i t y w i t h various kinds of records, the t r a i n i n g could be rendered more e f f e c t i v e i f the records that had been d e a l t w i t h were reviewed and compared o r , i f a f t e r a number of tasks of a s i m i l a r nature have been done, these were reviewed as a whole and the s i m i l a r i t y i n d i c a t e d . - 5 -- I l l '-Learning the V e r i f i c a t i o n  of Cash and Bank Balances The j u n i o r may next be allowed to a s s i s t i n the counting of small cash funds and In the preparation of the r e l a t i v e working papers. He i s i n s t r u c t e d to f o l l o w the previous working papers, which w i l l give him d e f i n i t e d i r e c t i o n s . The cash vouchers and other items making up the fund are l i s t e d . Currency i s set down by the various denominations of notes and m e t a l l i c money. Vouchers are l i s t e d i n d e t a i l , showing dates, p a r t i c u l a r s and amounts fo r each. Cheques and vouchers f o r advances are a l s o noted In d e t a i l showing dates, names o f drawers or persons to whom advances have been made, and the amounts of each. The vouchers are examined.to see that they bear the proper signatures and that they appear to be i n order. The work to be done i s c l e a r l y i n d i c a t e d on the previous schedules. A l l schedules the j u n i o r now prepares w i l l be subsequently reviewed by h i s senior and any omissions pointed out to him. The senior w i l l probably show him, f o r example, that he has f a i l e d to trace the cheques appearing on h i s schedule to'the cash book r e l a t i v e to the p a r t i c u l a r fund that i s being v e r i f i e d . Upon completion of t h i s part of the cash v e r i -f i c a t i o n he may be given work to do on the cash In bank. - 6 -Here again, the previous papers'show him what he i s to do. He traces paid cheques and a l s o deposits to the cash book and bank statements. In t r a c i n g the cheques he must examine them, paying p a r t i c u l a r a t t e n t i o n t o : the date of the cheque, the name of the payee, the signatures on each cheque (which should be of those who are authorized to s i g n cheques) the endorsements, and the date on which each cheque was p a i d . The d e t a i l appearing on the d u p l i c a t e deposit s l i p s i s a l s o checked w i t h the i n d i v i d u a l e n t r i e s i n the cash book. I n the p r e p a r a t i o n of. the r e c o n c i l i a -t i o n ' between the balance, as shown by the cash book, and that of the bank statement or bank pass book, the work i s more d i f f i c u l t . U s u a l l y the r e c o n c i l i a t i o n has already been prepared by the bookkeeper, and a l l that i s required i s that t h i s be checked. I f , however, the student has to prepare the r e c o n c i l i a t i o n h i m s e l f , he w i l l be c a l l e d upon to do some c a r e f u l t h i n k i n g . With no unusual items, however, i t may be a simple matter f o r him, by f o l l o w i n g what was done on the working papers of the previous a u d i t , to complete the necessary work. There may be items appearing on the bank statement that do not appear i n the cash book, or items i n the cash book, other than outstand-ing cheques, which are not to be found on the bank s t a t e -ment. Here he has a problem on h i s hands. F a i l i n g to f i n d the s o l u t i o n h i m s e l f he may consult h i s s e n i o r . In any event i t i s by attempting to work out the problem that - 7 he learns most q u i c k l y , as compared w i t h merely f o l l o w i n g the work completed by someone e l s e . This aspect of h i s l e a r n i n g w i l l be discussed more f u l l y l a t e r . D i s c ussion The student w i l l f i n d h i m s e l f . i n . a kind of i n t e l l e c t u a l maze but by f o l l o w i n g the devious paths l a i d out f o r him i n the papers of the previous a u d i t , be w i l l be l e d i n t o the open. His work, when he looks back upon i t , may seem meaningless and i t may remain so u n t i l he has done a great d e a l , by which time he may have acquired an understanding of i t as a whole. This understanding should be brought about much e a r l i e r . A f t e r the work has been completed i t should be reviewed and necessary explanations should be made. This f a c t i s demonstrated when we again consider what happens i f a mistake has been made. '.'hen the work i s being reviewed, some doubtful item may be discovered which, due to the l a c k of under- ' standing on the part of the j u n i o r , i s not adequately described. More information i s demanded. In order to give i t , the n e c e s s i t y a r i s e s f o r mental a c t i v i t y which always r e s u l t s In a f u l l e r conception of what i s being clone. I f ?rorking conditions permitted, time could be w e l l spent, as we s h a l l see, i n the s o l u t i o n of problems dealing w i t h t h i s phase of the work. - 8 -- IV -The Learning of Vouching Vouching i s the term used to describe the examination of i n v o i c e s , l e t t e r s and other documentary evidence by comparison w i t h the e n t r i e s i n the books of o r i g i n a l entry. In t h i s c l a s s of work the j u n i o r i s u s u a l l y s t a r t e d on the v e r i f i c a t i o n of petty cash disburse ments. He w i l l f i n d t h a t these are supported by i n v o i c e s approved by the employee res p o n s i b l e f o r the r e c e i p t of the goods or s e r v i c e s f o r which the i n v o i c e s were rendered Items such as postage stamps, c a r f a r e and s i m i l a r payments w i l l be supported by vouchers signed by the employee r e c e i v i n g the money. He must s c r u t i n i z e these c a r e f u l l y and l i s t a l l vouchers that appear to be missing. In vouch ing other disbursements, he must see that the i n v o i c e i s on the c r e d i t o r ' s own form and not on a form made up i n the o f f i c e of the c l i e n t . The date of the i n v o i c e w i l l be so inspected that he w i l l discover I f b i l l s are being r e g u l a r l y paid on t h e i r due date or otherwise. He must see that the i n v o i c e Is addressed to the c l i e n t and not to persons i n h i s employ. He must observe that r e c e i v i n g reports are attached, and that both are approved as to pr i c e s and c a l c u l a t i o n s . The method of going about the vouching depends upon the viay- the vouchers are f i l e d , e i t h e r a l p h a b e t i c a l l y by names of customers or accounts, or numerically. I f they are f i l e d n umerically i t i s only - 9 -necessary to a s c e r t a i n the number of the vouchers requ i r e d . I f a l p h a b e t i c a l l y , i t w i l l r e q u i r e the name of the customer or account as w e l l as the voucher. In some cases I t may be p o s s i b l e to do the vouching by working back i n the f i l e s to the books of o r i g i n a l entry. Discussion I t i s necessary f o r the j u n i o r to determine the simplest and shortest method p r a c t i c a b l e on the par-t i c u l a r set of books w i t h which he i s working. He takes an u n n e c e s s a r i l y long route the f i r s t time he does the work, and l e a r n s shorter and b e t t e r ways by h i s own experimentation. The number of d i f f e r e n t things to be remembered should be impressed at the outset. In p r a c t i c e t h i s i s not done. He memorizes by the d r i l l received i n the doing, perhaps at the expense of the work. I t would . be safer and more e f f i c i e n t i f he were d r i l l e d before the work commenced. Much time i s spent before he i s able to. remember a l l the things he must do. He i s u s u a l l y l e f t to f i n d the way f o r h i m s e l f , being t o l d once what to do and a f t e r having been given an I l l u s t r a t i o n . I f he has done the work p r e v i o u s l y he may r e c e i v e no d i r e c t i o n at a l l , though the manner i n which i t i s to be done may be quite d i f f e r e n t from that of any previous experience. D i r e c t i o n would e l i m i n a t e a great d e a l of l o s t time, and would be valuable even i f i t came a f t e r something had - 10 been completed, p r o v i d i n g more work of a s i m i l a r nature i s assigned before be has f o r g o t t e n what he has been 'told. - 11 -- v -Learning the V e r i f i c a t i o n of I n v e n t o r i e s -In the v e r i f i c a t i o n of i n v e n t o r i e s reference has already been made t o a r i t h m e t i c a l c a l c u l a t i o n s . At a l a t e r stage the j u n i o r w i l l be given work i n connection w i t h q u a n t i t i e s and p r i c i n g . He w i l l be required to examine o r i g i n a l inventory f i g u r e s , Inventory records, r e c e i v i n g reports and shipping r e p o r t s i n - confirmation of the q u a n t i t i e s . When a p h y s i c a l inventory "has been taken, he must make a comparison of the inventory sheets w i t h a selected number of o r i g i n a l t i c k e t s , cards or memoranda, showing the r e s u l t of. the counting, weighing or measuring. He receives s p e c i f i c i n s t r u c t i o n s as to the amount of work to.be done and, I f . t h e work be com-p l i c a t e d , he i s t o l d the manner i n which to go about i t . He may a l s o be r e q u i r e d to check c e r t a i n items on the inventory sheets by reference to inventory records, when he "must f i r s t f i n d out whether q u a n t i t i e s alone are to be checked, or whether he must v e r i f y u n i t p r i c e s and amounts. I f the sheets are compiled from p h y s i c a l i n v e n t o r i e s , there may be numerous d i f f e r e n c e s between the sheets and the records. I f the sheets are prepared from book i n -v e n t o r i e s , the sheets and records w i l l agree. He must be ever on the a l e r t f o r d i f f e r e n c e s that may lead to some important readjustment of the inventory. He must keep - 12 -h i s eyes open f o r valuable i n f o r m a t i o n as to slow moving m a t e r i a l , as the records w i l l show purchases or production and sales i n the account f o r each commodity. Discontinued products, damaged merchandise and such items are i l l u s -t r a t i o n s of what he may d i s c o v e r . In h i s examination of the shipping records, he must use care to see that no f i c t i t i o u s b i l l i n g s have been made and t h a t merchandise b i l l e d to customers i s excluded from - the inventory. He w i l X r e c e i v e no d e f i n i t e i n s t r u c t i o n s . f o r the d e t e c t i o n of f i c t i t i o u s b i l l i n g , though the p o s s i b i l i t i e s f o r manipulation are numerous. In the t e s t s that he makes, of course, he w i l l be guided by h i s i n s t r u c t i o n s i n each p a r t i c u l a r case. Copies of i n v o i c e s are u s u a l l y examined to see that the sales appear r e g u l a r , and the shipping records t o see that the goods were a c t u a l l y shipped,, O r i g i n a l orders are examined to a s c e r t a i n i f the goods were ordered and i f the terms thereof are complied w i t h . In order to c e r t i f y p r i c e s , a systematic plan i s used, based on that of previous a u d i t s . I t u s u a l l y con-s i s t s of l i s t i n g c e r t a i n items that are to be v e r i f i e d and of examined i n v o i c e s i n support of a l l the amounts appear-ing thereon. The p r i c e s shown .on the most recent i n -voices are the ones that are examined; and they, of course, should be approximately the same as those used i n v a l u i n g the i n v e n t o r i e s . - Such items as duty, f r e i g h t , insurance and s i m i l a r charges may be included i n the f i n a l p r i c e , - 13 -in'which case the schedule w i l l have columns to take care of these. The j u n i o r must a s c e r t a i n a l s o whether a l l the in v o i c e s examined by him have been recorded i n the books; and to do so he must make reference to the inventory records. He f i n d s that u s u a l l y the hest way to do t h i s i s to i n s e r t the numbers of the required vouchers on the schedules and to get the vouchers from the' f i l e s a l l at the same time. This shorter method he may not discover u n t i l he has done a number- of jobs of t h i s d e s c r i p t i o n . P a r t i c u l a r i n s t r u c t i o n s w i l l be given to him i n regard to the v e r i f i c a t i o n of market p r i c e s as' to the sources to which he must r e f e r , such as trade papers, p r i c e l i s t s and s i m i l a r data. In t h i s connection, he i s u s u a l l y r e f e r r e d to the purchasing department where complete I n -formation i s a v a i l a b l e . He may a l s o o b t a i n information as regards d i f f e r e n c e i n s i z e s , grades and composition and any matters r e l a t i v e to the p r i c e . He should not accept the information he receives without i n v e s t i g a t i o n , but should s a t i s f y h i mself that i t i s c o r r e c t . Piscussion. A t e c h n i c a l knowledge i s required that can only be obtained by experience, and there are many f a c t o r s that c o n d i t i o n the t r a i n i n g i n t h i s regard. In one case the ju n i o r may be de a l i n g w i t h an inventory of canned salmon and i n another i t may be v i t r i f i e d pipe. Notwithstanding - 14 -t h i s , there are enough classes of working papers on the same subject so t h a t he can be g r e a t l y a s s i s t e d . A d i f f i c u l t y l i e s i n the f a c t that i t i s g e n e r a l l y too long before he i s given another opportunity f o r doing the same ki n d of work again. This could be overcome i f he were given work on s i m i l a r types of i n v e n t o r i e s . This work, of course, would only be i n the nature of p r a c t i c e , f o r , o b v i o u s l y , the .time f o r doing i t i s p r e s c r i b e d by c o n d i t i o n s which can hardly be c o n t r o l l e d . As the student i s t r a i n e d at present i t takes years before he can keep i n mind a l l the important things that are necessary i n • the v e r i f i c a t i o n . The main, reason f o r t h i s l i e s i n the f a c t t h a t no d e f i n i t e e f f o r t i s made to equip him w i t h t h i s i n f o r m a t i o n , apart from circumstances i n vrtiich the work normally occurs. In the multitude of v a r i a t i o n s that w i l l be encountered, he can h a r d l y be expected to • remember very much of what he has learned, unless d e f i n i t e steps are taken to Impress the d e t a i l s upon h i s mind. The i d e a l c o n d i t i o n would be one i n which he would be permitted to do nothing else but t h i s k i n d of work u n t i l he became f u l l y acquainted math i t . He could s t a r t on the e a s i e r and be gradually taken to the more d i f f i c u l t . The im-portant p r i n c i p l e s could be introduced, widened and strengthened on a s c i e n t i f i c b a s i s . "• - 1 5 -Learning the V e r i f i c a t i o n .  Qf Accounts and Motes Receivable The Junior may be i n s t r u c t e d to v e r i f y the accounts r e c e i v a b l e , which means tha t he must,ascertain from the ledger the date or dates on which the outstand-i n g balance was: i n c u r r e d and write. I t on the schedules of accounts that have been submitted to him, opposite t h e " p a r t i c u l a r amount, His object i s to give informa-t i o n that w i l l u l t i i s a t e l y lead to the formation of an opin i o n as to whether or not an account i s good and . c o l l e c t i b l e . I f the account has been paid subsequently to .the date of the ••'financial, statement, no be t t e r evidence could be given of i t s c o l l e c t i b i l i t y - , so that in' t h i s case i t i s not necessary t o age the account. I t oft e n occurs, however, that the j u n i o r w i l l f i r s t age the account aJnd afterwards a s c e r t a i n that a l l or part of the amount that he has aged has been p a i d , thus showing that he has done unnecessary work. He i s not being watehed as he does t h i s work; so tie can only l e a r n f o r himself that i t can be done more e x p e d i t i o u s l y . The amount of d e t a i l r e q u i r e d f o r h i s ageing w i l l be ascertained by c o n s u l t a t i o n •with'Ms s e n i o r . What should be considered s u f f i c i e n t c r e d i t terms? Should the balances have been paid a f t e r t h i r t y , s i x t y or n i n e t y days? Quite o f t e n the ledgers are marked In such a manner, f o r the c l i e n t ' s own Use, so as to make such information r e a d i l y a v a i l a b l e . He must make notes of any informat i o n that Is r e l a t i v e to the c o l l e c t i b i l i t y of the accounts. He should r e f e r to the c r e d i t l i s t to f i n d whether the customer Is' i n f i n a n c i a l d i f f i c u l t j ^ whether the account has been passed by a t h i r d party f o r c o l l e c t i o n , whether there i s any probable l i t i g a t i o n i n v o l v e d or whether the item i s i n dis p u t e . Experience and the suggestions that he received from the l i s t s that were used on the previous a u d i t are of i n v a l u a b l e a s s i s t a n c e . He w i l l be expected to check copies of in v o i c e s rendered f o r a c e r t a i n period through from the sales j o u r n a l , a l s o shipping records, to see that the merchandise shown by the Invoices was a c t u a l l y taken out of the inventory records before the end of the period. He must keep i n mind that he i s t r y i n g t o ' a s c e r t a i n that these i n v o i c e s are not f i c t i t i o u s s a l e s or consigned s a l e s . At the same time he w i l l make a t e s t check of any c r e d i t memoranda and e n t r i e s made i n the books of o r i g i n a l entry a f t e r the period of the au d i t to a s c e r t a i n i f any of these a f f e c t the c o l l e c t i b i l i t y of the accounts at the end of the p e r i o d . Notes r e c e i v a b l e are u s u a l l y examined and l i s t e d at the date of the a u d i t , at the same time the cash i s counted. The form followed w i l l be i n d i c a t e d by previous l i s t s , which the a s s i s t a n t i s expected to follow- c l o s e l y . He w i l l - b e c r i t i c i z e d i f he f a l l to do - 17 -so or i f he make any v a r i a t i o n s therefrom without e x c e l l e n t reason-. The l i s t s of notes r e c e i v a b l e u s u a l l y show, for-each note, the number of the note, the date of the note, the names of the makers, the names of the endorsers, the due date, the r a t e of i n t e r e s t , the date to which t h i s has been p a i d , the amount of the note, the c o l l a t e r a l held and the value thereof. The t o t a l , o f the l i s t Is subsequently checked to the c o n t r o l account to see that I t i s " i n agreement. I f a l l the notes are not on, hand a l i s t w i l l be received of those held elsewhere and f r t l l be confirmed by c e r t i f i c a t e r e c e i v e d d i r e c t from t h e i r custodians, such as bankers or c o l l e c t i o n agents. In v e r i f y i n g the existence of a note, the j u n i o r i s i n c l i n e d at f i r s t to l o s e s i g h t of the f a c t that i t i s also h i s main duty, as i n the case of the accounts r e c e i v a b l e , to give i n f o r m a t i o n whereby an o p i n i o n may be formed as to t h e i r c o l l e c t i b i l i t y . Quite o f t e n , too, the mistaken impression e x i s t s t h a t because the debt takes the form of a note i t may be considered good. The j u n i o r has to l e a r n to be on h i s guard against t h i s idea which i s e a s i l y held and i s too o f t e n held by the c l i e n t . I f he i s informed that the note Is secured by a l i e n on the product.of the company, t h i s i s not enough. He must a s c e r t a i n the r e a l i z a b l e value of the asset against which the l i e n i s held and the cost of r e a l i z a t i o n . He must l e a r n not to - 18 -take i t f o r granted t h a t , because a property once had a value g r e a t l y i n excess of i t s present day worth t h a t i t i s s t i l l as v a l u a b l e . This may not occur to him when he i s w r i t i n g the in f o r m a t i o n on h i s schedule, but he w i l l be questioned about the matter l a t e r . D iscussion The forming of an o p i n i o n as to the c o l l e c t -i b i l i t y of accounts comes from the informa t i o n given on the schedules. This work i s of a somewhat complex nature and, as was the case i n the l e a r n i n g p r e v i o u s l y de s c r i b e d , there i s no doubt but that t r a i n i n g could be improved i f i t were p o s s i b l e f o r the lear n e r to be some-t h i n g of a s p e c i a l i s t u n t i l he has acquired a valuable mass of experience. Too great a period of time i s allowed to elapse before he again does the same ki n d of work. Much could be gained i f the o b j e c t i v e were c a r e f u l l y placed before him by h i s s e n i o r . The j u n i o r i s i n c l i n e d to do h i s work, f o l l o w i n g the path l a i d out f o r him, without a r e a l i z a t i o n of the part h i s work Is p l a y i n g . He has no comprehensive view of what he i s doing. I t i s true he gr a d u a l l y acquires t h i s a f t e r f o l l o w i n g the same procedure many times. I t dawns on him, in s t e a d of being d e f i n i t e l y placed before him by h i s senior. I t i s true the senior does attempt to make him r e a l i z e what he Is doing, par-- 19 t i c u l a r l y when he i s subsequently questioned regarding i n f o r m a t i o n he has f a i l e d to put on h i s working papers. More progress could De made i f the senior made h i s explanations at the proper time. " , • - VII - • : Learning the P r e p a r a t i o n * v of Schedules; of Accrued and Prepaid Items ' The preparation, of schedules of accrued or pre-paid items, t y p i c a l of .-which are. wages, i n t e r e s t , taxes, insurance, r e n t and s u c h . s i m i l a r accounts, may be: c a l l e d f o r . In: v e r i f y i n g accrued wages the amounts of the l a s t p a y r o l l paid during.the p e r i o d , the f i r s t p a y r o l l s of the next p e r i o d and the periods covered.by the payment w i l l be obtained. '."'.With;this i n f o r m a t i o n at hand the amount of the accrued p a y r o l l can be e a s i l y determined. 'Accrued i n t e r e s t , , accrued taxes and s i m i l a r a c c r u a l s are checked i n d e t a i l by reference t o the a c t u a l supporting.data and the ' c a l c u l a t i o n thereof. In connection w i t h the' v e - r i f i - ' c a t i o n of prepaid,.rent j the junior, may be t o l d to prepare,, a; l i s t of l e a s e s on which :he notes the d a t e ; o f the l e a s e , names of the p a r t i e s , the term and renewal: p r i v i l e g e s , rent payable f o r o r i g i n a l term and inevent of renewals, s p e c i a l s t i p u l a t i o n s as to s u b l e t t i n g p r i v i l e g e s , e t c . The vouchers f o r payments made w i l l be examined i n con-J u n c t i o n t h e r e w i t h . The determination of the a c t u a l amount prepaid w i l l be a r r i v e d at by a d i r e c t reference t o the i n f o r m a t i o n as shown on, h i s schedule, which w i l l have been confirmed, by examination of a c t u a l leases or documents r e l a t i v e t h e reto., The c a l c u l a t i o n s i n each case have u s u a l l y been,made p r e v i o u s l y . The only problem i>hat- -remains-- ..is • to '.-follow', the .reasoning; and to check the premises;.In v e r i f y i n g prepaid insurance, he draws up. a schedule; g i v i n g the f o l l o w i n g i n f o r m a t i o n ; number of p o l i c y , name of insurance company, r i s k against which Insured^ amount of coverage provided by p o l i c y , date of commencement of insurance,: date of termin a t i o n of Insurance, amount of premium and amount of insurance prepaid. This i n f o r m a t i o n i s obtained from the a c t u a l p o l i c i e s them-selves or, I f the informat i o n I s obtained from a r e g i s t e r of; insurance, the .-policies, are! checked i n d e t a i l with. the'. Information as i t I s shown on the schedule. In ; calculating the 'proportion, o f the premiums . prepaid^'- the a c t u a l number of days i s ascertained from the schedule, that i s the date of the commencement of insurance and the premium. Be.mdst observe t h a t the p o l i c y i s the signed o r i g i n a l , not a signed copy. I f i t Is a copy he/must rep o r t i t • to h i s senior,.as the whereabouts of the o r i g i n a l must be •known.and I t s existence e s t a b l i s h e d . I f i t i s i n the hands of a t h i r d person i t w i l l be necessary to determine that person's i n t e r e s t , as there i s a p o s s i b i l i t y that an/unrecorded l i a b i l i t y may be discovered. The c l i e n t may.be borrowingmoney by mortgaging h i s r e a l estate and making no record thereof i n h i s books. An asset Which may have a c t u a l l y been s o l d may be shown on the books. The j u n i o r must: a l s o see that the j j o l i c y i s i n the /favour of the c l i e n t . I f i t . i s payable to someone - 22 -e l s e , or to the c l i e n t and someone e l s e , as t h e i r i n t e r e s t s may appear at that date, i t w i l l be necessary 'f to a s c e r t a i n the i n t e r e s t held or l i a b l e to be held i n the c l i e n t ' s property and the a.ccounting i n respect thereof must appear on the c l i e n t ' s books. Discussion This again i s t y p i c a l of the general nature of the work f o r which the t r a i n i n g i s being r e c e i v e d . C e r t a i n f a c t s are derived from various sources and, by the process of reasoning, the conclusion i s a r r i v e d at which f i n d s i t s e l f expressed i n one of the assets or l i a b i l i t i e s on the f i n a n c i a l statement. The f a c t s must be e s t a b l i s h e d by examination of t h e i r a u t h o r i t y . The reasoning must be questioned t° determine that the conclusion r i g h t l y f o l l o w s from that a u t h o r i t y . The establishment of the f a c t s i s a matter of t r a i n i n g such as i s being o u t l i n e d . The a b i l i t y to question and analyse the l o g i c , and to be s a t i s f i e d that i t i s true and to be c o r r e c t i n doing so, in v o l v e s complex mental operations that are not only a matter of t r a i n i n g but also depend to a high degree on n a t u r a l endowment. Part of the above information i s c a l l e d f o r on the working papers, so that whether or not he understands i t , he cannot f a i l to give i t . Other in f o r m a t i o n , such as whether the p o l i c y i s i n the name of the company or whether - f i o — or not the p o l i c y i s a copy, i s not required to he shown on h i s working papers, and he can f a i l to give i t . I f h<e r e a l i z e d the object of his.work, t h i s omission Yrould not occur. In other words, i f he were shown what the work leads t o , and were expected to work w i t h t h i s i n h i s mind, the d e t a i l v/ould be a u t o m a t i c a l l y i n c l u d e d . I t i s seldom that the j u n i o r i n h i s e a r l y stages i s b r i l l i a n t enough to have a comprehension of t h e ' r a m i f i c a t i o n s of the reasoning that was i n the mind of those who planned the work. F i r s t , he should a s c e r t a i n the amount of the prepaid insurance and secondly, obtain information regarding the existence of the assets t o which the insurance r e l a t e s , and make sure t h a t a l l r e l a t i v e l i a b -i l i t i e s are taken up i n the accounts. This w i l l be d e a l t w i t h f u r t h e r i n considering the a n a l y s i s of various accounts. • ' - * - 24 -- V I I I -Learning the V e r i f i c a t i o n of Accounts and  Notes Payable and Outstanding L i a b i l i t i e s A l i s t of the balances of the accounts payable ledger or a l i s t of unpaid vouchers, i f a voucher r e g i s t e r i s kept, may be presented f o r v e r i f i c a t i o n . .Balances must be checked to the i n d i v i d u a l accounts i n the le d g e r s . A l l balances which have been outstanding f o r a long time are to be i n v e s t i g a t e d to discover i f there are any l a t e r b i l l s which should a l s o have been included , or i f there i s a d i s -pute which may i n v o l v e f u r t h e r l i a b i l i t y . There may also be accumulation of i n t e r e s t on the items which are out-standing. I f any d e b i t balances appear, the j u n i o r must * dea l w i t h these i n the same manner as he d i d w i t h accounts r e c e i v a b l e . There i s a tendency, when given l i s t s of accounts payable f o r the f i r s t time,.merely to mark these d e b i t s as checked i n the same manner as the c r e d i t balances. He i s not l i k e l y to r e a l i z e that they are not d i f f e r e n t from account's r e c e i v a b l e , and that t h e i r c o l l e c t i b i l i t y must be determined i n the same manner. I f an account c a l l e d "sundries" i s included In the l i s t , f u l l d e t a i l s of these must be procured. D e f i n i t e , i n s t r u c t i o n s may not be given w i t h regard to this,and he must be c a r e f u l not to accept,'without I n v e s t i g a t i o n , such ambiguous t i t l e s as the above, or any of a s i m i l a r nature that do not c l e a r l y i n d i c a t e a c r e d i t o r . An examination must be - 25 -made of monthly statements issued by the more important c r e d i t o r s to see that these are In agreement w i t h the amounts appearing on. the l i s t . Important d i f f e r e n c e s or items that cannot be understood, must be r e f e r r e d to the a t t e n t i o n of the s e n i o r . In v e r i f i c a t i o n of notes payable the prepar a t i o n of a schedule i s required from the notes payable account, g i v i n g the f o l l o w i n g informa-t i o n - date of iss u e of the note, name of c r e d i t o r , I n t e r e s t r a t e , tenure and due date, name of endorser, c o l l a t e r a l hypothecated, accrued or prepaid i n t e r e s t , and remarks as to the confirm a t i o n of the existence of the notes. The required Information should be obtained from the notes payable book. The t o t a l must agree w i t h the general ledger balance. The notes are examined to see that the in f o r m a t i o n thereon i s i n agreement w i t h the d e t a i l s as shown by the a n a l y s i s of the notes payable account. Cancelled notes are examined f o r a l l notes paid during the pe r i o d . A t e s t check of payments w i l l be v e r i f i e d I n the same way. The information i s a l s o confirmed by correspondence d i r e c t l y w i t h the c r e d i t o r s , xvhich w i l l be checked to these l i s t s . In order to a s c e r t a i n whether a l l l i a b i l i t i e s have been taken up, the j u n i o r w i l l be requested to examine a l l t r a n s a c t i o n s recorded since the close of the period under review. He w i l l examine vouchers and in v o i c e s - 26 -from vendors. .He w i l l s c r u t i n i z e payments made, debi t s and c r e d i t memoranda issued, j o u r n a l e n t r i e s , r e c e i v i n g r e p o r t s and stock records. He w i l l , of course, receive s p e c i f i c i n s t r u c t i o n s as to the a c t u a l work he i s to do. As a l l i n v o i c e s dated p r i o r t o , or- on the ' l a s t day of, the period should have been recorded In the books as l i a -b i l i t i e s , i t i s h i s duty to check c a r e f u l l y the in v o i c e s as to t h e i r dates. Upon d i s c o v e r i n g an i n v o i c e that has •been omitted he w i l l - l i s t f u l l p a r t i c u l a r s , the important i n f o r m a t i o n being' the name of the account to be charged, the date of the r e c e i p t of the merchandise and whether the merchandise has been included i n the inventory or not. The name of the account being charged, the nature of the expense and the period f o r which b i l l e d , must be shown f o r a l l unrecorded i n v o i c e s f o r expenses. Discussion. Even a f t e r the j u n i o r becomes f u l l y competent to' give a l l the informat i o n r e q u i r e d , he does not necessar i l y understand the importance of a l l of the d e t a i l or the part i t plays i n connection with the f i n a l r e s u l t . He does not look f o r reasoning, he f o l l o w s and works by i m i t a t i o n . He should be a s s i s t e d i n producing the reason i n g h i m s e l f . He should f i r s t of a l l be asked what he i s endeavouring to a s c e r t a i n , namely, i f the f u l l l i a b i l i t y of the company had been set up both as to p r i n c i p a l and - 27 -i n t e r e s t , or whether i t had been overstated. He could be asked what a l l the d e t a i l on the schedule he was about to prepare had to do w i t h t h i s o b j e c t i v e . I f t h i s method were adopted, wherever l i s t s or schedules were,prepared, i t would produce b e n e f i c i a l r e s u l t s . I t would make him l e a r n l o g i c a l l y i n s t e a d of by memorization through r e p e t i t i o n . The main o b j e c t i o n to h i s present mode of l e a r n i n g i s that he f o l l o w s h i s i n s t r u c t i o n s , but the i n s t r u c t i o n s do not give the f i n a l o b j e c t i v e s of the work or show the connection w i t h the various minor element A schedule could be drawn up e x p l a i n i n g i n some d e t a i l the cause f o r the work and the general r e l a t i o n s h i p of the i n t e g r a l p a r t s i n connection w i t h each p a r t i c u l a r s e c t i o n . The schedule could be prepared on a sound p s y c h o l o g i c a l basis that would ensure increase i n e f f i c i e n c y and e f f e c t a more r a p i d development on the part of the j u n i o r . — <;8 - IX -The Learning of Posting; P o s t i n g i s the name f o r the procedure whereby every entry i n the books of o r i g i n a l entry i s traced i n d e t a i l or i n t o t a l to the accounts of the general ledger. In-checking postings, the j u n i o r must a s c e r t a i n that a l l e n t r i e s i n the book of o r i g i n a l entry have been c a r r i e d i n t o t a l to the general 'ledger and to the subsid-i a r y ledger; that a l l debits have been posted as such and that a l l c r e d i t s have been posted as c r e d i t s ; that the e n t r i e s have been posted to the proper account and that a l l e n t r i e s are understood. The work of posting i s u s u a l l y s t a r t e d i n c o l l a b o r a t i o n w i t h the senior a s s i s t a n t , who i s f a m i l i a r w i t h the procedure, the j u n i o r c a l l i n g the e n t r i e s from the references that are given to him by the sen i o r . There are various ways of doing the checking on the d i f f e r e n t types of records, and he must discover the shortest method. He cannot r e l y e n t i r e l y on posting f o l i o s appearing i n the books, but should make c e r t a i n that every entry i s posted regardless of whether or not a posting f o l i o appears i n the entry. When columnar records are i n use, he must be sure that the t o t a l s of' the columns are posted, i f the d e t a i l s thereof have not been posted. For example, the column f o r raw materials i n the voucher r e g i s t e r w i l l almost always be posted i n t o t a l . The column f o r sundries may be posted i n d e t a i l - 29 -or i t may be summarized and the postings made from the summary. C e r t a i n columns, again, may be posted i n t o t a l as w e l l as i n d e t a i l , such as the accounts payable column of the voucher r e g i s t e r . The t o t a l of t h i s column w i l l be posted to the accounts payable i n the general ledger and to the i n d i v i d u a l c r e d i t o r ' s account i n the c r e d i t o r s , l e d g e r , i f such ledger be i n use. As was p r e v i o u s l y s t a t e d , he must be sure that postings have been made, to the proper account and that the e n t r i e s are understood. He f i n d s that the best way f o r doing t h i s i s to obtain at f i r s t an o u t l i n e of the accounts used, i n d i c a t i n g the accounts that w i l l be affected;. Consideration should then be given to the p a r t i c u l a r s of the entry to decide i f that account i s the one i n which the entry should be recorded. He i s required to read each ent r y , mentally noting the account a f f e c t e d , and i s then able to determine whether or not the entry i s c o r r e c t . D i s cussion Many years of checking of postings would be necessary before bookkeeping could be learned i n t h i s way. The reason i s t h a t , i n checking the p o s t i n g , a d i f f e r e n t process of thought i s involved with a d i f f e r e n t aim i n view. The bookkeeping i s learned i n c i d e n t a l l y , assuming, of course, that the j u n i o r has done no bookkeeping. The checking of postings i s a somewhat mechanical process. - 50 -Any improvement that could be made, as i s apparent from the d e s c r i p t i o n of the work, would come i n the way the posting was aone, that i s to say, the a c t u a l route taken. Here, as elsewhere, there, are r i g h t ways and wrong ways, short.ways and long ways. The j u n i o r i s given no d e f i n i t e i n s t r u c t i o n as to which i s the best way to s t a r t . As was i n d i c a t e d , he has done the work before w i t h a senior and he may or may not have done enough of i t to know which i s the s h o r t e s t route. A l i t t l e time, spent w i t h him showing the a l t e r n a t i v e routes he may take, and question-in g him w i t h regard to work th a t had been done before, would unquestionably be b e n e f i c i a l . As regards the under-standing of the e n t r i e s , t h i s i n v o l v e s knowledge and t r a i n - ' i n g of the highest degree. To be i n a p o s i t i o n where he can do so he must be f u l l y competent and should have received a t r a i n i n g such as w i l l be o u t l i n e d . I t f r e q u e n t l y happens that he i s given the work to do without having received the t r a i n i n g . I f we consider that I t i s necessary f o r him to havd at ready reference the whole body of p r o f e s s i o n a l knowledge which he must bring to bear i n examination of the correctness of any entry, we r e a l i z e the distance he must t r a v e l before he i s competent to deal properly w i t h t h i s task. This p a r t i c u l a r s e c t i o n i n v o l v e s so extensive a f i e l d as to occupy the e n t i r e technique of some p r o f e s s i o n a l accountants. - 31 -- X -Learning the A n a l y s i s of  C a p i t a l Asset Accounts The f i r s t important f a c t that i s to be learned i n the a n a l y s i s of any account i n the general ledger i s that the other side of the entry must be shown and a l s o a d e s c r i p t i o n of the nature of the t r a n s a c t i o n . This may be very simple when i t i s so s t a t e d , but i t i s a f a c t of fundamental importance and i s another way of saying, "Show the bookkeeping". However simple t h i s p r i n c i p l e may appear to be, the j u n i o r does not understand i t immediately. In confirming expenditures on such c a p i t a l assets as l a n d , b u i l d i n g s , machinery and equipment and such i n t a n g i b l e assets as g o o d w i l l , patents and trade-marks, schedules are drawn up and a d d i t i o n s and deductions v e r i f i e d . Upon s t a r t i n g h i s work he w i l l be furn i s h e d w i t h the schedules d e a l i n g w i t h the same account on the previous a u d i t , which he f o l l o w s c l o s e l y . These schedules show p a r t i c u l a r s d e s c r i b i n g the account, opening balances, a d d i t i o n s , deductions and other changes and the f i n a l balance. His work, though i t may be new, c o n s i s t s of f o l l o w i n g . t h a t which has gone before. I f anything i s charged i r r e g u l a r l y to c a p i t a l that should have gone to operating ana he overlook i t , i t w i l l be shown on h i s - 52 -schedules and w i l l be discovered l a t e r . The changes i n these accounts are c h i e f l y explained by new purchases, p a y r o l l or s t o r e t r a n s f e r s . • I n v e r i f y i n g p a y r o l l and store t r a n s f e r s , he i s not l e d very f a r a f i e l d from work he has already done, f o r he has p r e v i o u s l y done considerable work on both of these items. The r e l a t i v e ease w i t h which he i s able to confirm the amounts that are shown on h i s schedule may lead him away from the more important problem. Are these stores and p a y r o l l t r a n s f e r s proper charges to c a p i t a l and how have they been determined? - that i s , how d i d t h e i r compiler d i f f e r e n t i a t e between operating charges and c a p i t a l charges i n making h i s d i s t r i b u t i o n ? I f t h i s question does not confront the j u n i o r as a r e s u l t of whatever i n f o r m a t i o n he has gathered in. the course of h i s experience, i t w i l l be placed before him, e i t h e r by the notes on the previous schedules or by h i s s e n i o r , i f he f a i l to make enquiry i n connection therewith. Discussion Here again, i t i s p o s s i b l e f o r the j u n i o r to analyse the accounts without f u l l y r e a l i z i n g the .significance of what he i s doing. He should c l e a r l y understand that he i s to show the other account or accounts a f f e c t e d by the e n t r i e s he examines and to give a b r i e f d e s c r i p t i o n of the nature of the t r a n s a c t i o n . He should have c e r t a i n - 33 -aims before him, based on an understanding of the part h i s work p l a y s . He should, of course, r e a l i z e that he i s again confirming the existence of an asset. He should have a. knowledge of the l o g i c a l method used f o r doing t h i s . Such i s not the case at f i r s t . By i m i t a t i n g the work that was done on the preceding a u d i t , he shows the other side of any entry that has been made and gives a b r i e f d e s c r i p -t i o n of i t , and a l s o marks i t i n a manner to i n d i c a t e that he has examined some document a u t h o r i z i n g the entry. - 34 -- XI -Learning the V e r i f i c a t i o n of  Share C a p i t a l and Examination of Minute Books The j u n i o r may work i n v e r i f i c a t i o n of share c a p i t a l and on such data as the minutes of the meetings of the d i r e c t o r s and shareholders of the company. He w i l l examine the share c e r t i f i c a t e stubs and see that the t o t a l agrees w i t h that as shown by the general ledger to be outstanding. When he does t h i s the f i r s t time, he may be asked to prepare a l i s t of the names from the share c e r t i f i c a t e stubs of the shares outstanding. I t w i l l be compared w i t h the t o t a l as shown by the ledger, and he w i l l be corrected i f he has made any e r r o r . He may be requested to make a t e s t check of the e n t r i e s from the r e g i s t e r of t r a n s f e r s by examining the c a n c e l l e d c e r t i f i c a t e s turned i n and accounting f o r the new c e r t i f i c a t e s issued i n exchange t h e r e f o r . He may a l s o make a t e s t check of the posting from the r e g i s t e r of t r a n s f e r s to the r e g i s t e r of shareholders, the purpose of his. work being to assure the accountant that the company has not issued more stock than i t has been authorized to issue and that the number of shares outstanding, as shown by the accounts, i s c o r r e c t . In being asked to make a synopsis of the minutes of d i r e c t o r s ' and shareholders' meetings, the j u n i o r i s given work that c a l l s f o r something e n t i r e l y d i f f e r e n t from anything he has done before. He can gather from the previous working papers t h a t he must show the date of the meeting, the kind of meeting, d i r e c t o r s ' or share-h o l d e r s ' , names and the -positions of persons s i g n i n g the minutes. When i t comes to making a synopsis of the minutes themselves, there i s l i t t l e to guide' him. His f i r s t e f f o r t w i l l be c a r e f u l l y watched and doubtless added t o . I t i s only by many e f f o r t s that he comes to understand what i s important and what i s wanted. There i s much i n the minutes which has no importance as f a r as the au d i t o r i s concerned. On the other.hand, some of the most v i t a l t r a n s a c t i o n s w i t h which he i s concerned appear i n the minutes, and of these he must have knowledge. Discussion Everything that has been s a i d w i t h regard to the d e t a i l work a p p l i e s with equal fo r c e to the work on share c a p i t a l . The j u n i o r i s not conscious of the reasons or the place of the work i n the a u d i t . Much of what he does i s mechanical, and there are numerous things that he should have before his- mind. He i s not d r i l l e d on these to the same extent as i n the ether instances c i t e d , because the work comes at wider i n t e r v a l s of time, so that he may forge t most of what he has learned. - 56 -In h i s checking of the r e g i s t e r of t r a n s f e r s , where i t was not necessary f o r him to prepare a schedule of the work done, except to s t a t e that he had c a r r i e d out a c e r t a i n amount of checking, h i s errors are not known. They can, t h e r e f o r e , be of l i t t l e use as a means f o r guiding him. In l i s t i n g the names from the share cer-t i f i c a t e stubs, the e r r o r s that are made w i l l become apparent and may be corrected. He may not know, however, f o r some time why he i s doing the work, as the e r r o r s w i l l not n e c e s s a r i l y i n d i c a t e t h i s , u nless, as each e r r o r Is c o r r e c t e d , the r e l a t i o n s h i p to the o b j e c t i v e s i s I n d i c a t e d . When he makes h i s f i r s t attempt to synopsize the minutes of the shareholders' meeting, he has l i t t l e idea of what i s expected. The work i s c a r r i e d out too much on a t r i a l and e r r o r b a s i s . Though everything he w r i t e s may be examined, and improvement may be e f f e c t e d , that which he has overlooked may not be known. Some attempt should be made to show him, by a review of numerous examples, what i s expected, a f t e r which he should be questioned to a s c e r t a i n -whether he i s t h i n k i n g along the r i g h t l i n e s . He could be shown what information contained i n the minutes i s important from t h i s point of view, i n s t e a d of l e a r n i n g , a~ he does at present, by t r y i n g to f o l l o w as n e a r l y as p o s s i b l e the previous papers. - 57 -- X I I -D e s c r i p t i o n and Discussion of the Learning of  A n a l y s i s of P r o f i t and Loss Accounts A d e s c r i p t i o n of the work on the a n a l y s i s of the p r o f i t and l o s s s e c t i o n of the general ledger w i l l i n d i c a t e an advanced form of the t r a i n i n g that has been p r e v i o u s l y received.. The j u n i o r i s expected to "show the. book-keeping". He has, of course, the previous working papers, which he f o l l o w s as to form and which give him considerable a i d i n h i s work, as many of the items are unal t e r e d from year to year. Y/hen he begins, h i s tendency i s to i m i t a t e , without r e f l e c t i o n , the previous papers, t r y i n g as best he can to give s i m i l a r Information to that shown on these papers. This w i l l c a r r y him through, as long as he does not get any new or unusual problems, i n which case, of course, he may appeal to h i s s e n i o r . I t i s not u n t i l he l e a r n s t h a t he must show where the other side of the entry has been recorded and that he must give the p a r t i c u l a r s , that he i s able to analyse an account properly. The p r o f i t and l o s s schedules are arranged i n the order that the items appear on the p r o f i t and l o s s statement. I t w i l l be unnecessary to deal with the a n a l y s i s of every item. C e r t a i n of the more important ones w i l l i n d i c a t e the nature of h i s work and show the method - 38 -through which i t i s learned. •Sales are analysed i n sk e l e t o n , that i s to say, the schedule w i l l show cash and accounts r e c e i v a b l e , which are the other side of the e n t r i e s , and then show monthly t o t a l s . The work here i s supported by d e t a i l v e r i f i c a t i o n on s a l e s . I n showing the monthly t o t a l s , the j u n i o r i s expected to i n v e s t i g a t e i f he f i n d unusual f l u c t u a t i o n s . I f he does not do t h i s , he i s c e r t a i n to be questioned as to the reason f o r tlie f l u c t u a t i o n s , i f t h i s does not appear on the working papers. In the a n a l y s i s of the various accounts that make up the Cost of Sales, the same form w i l l be followed. In the case of purchases of raw m a t e r i a l s , he shows cash and accounts payable and a general d e s c r i p t i o n of the' nature of the purchases. In some cases he i s expected, e s p e c i a l l y i n the.purchase of such valuable items as t r a c -tors or automobiles, when they are purchased f o r s a l e , t o give a l l d e t a i l s , both as to qu a n t i t y and amount and the s e r i a l number and d e s c r i p t i o n of the a r t i c l e i nvolved. T h i s , of course, i s al s o true of sales under the same c i r -cumstances, where the q u a n t i t a t i v e f i g u r e s are used i n con-f i r m a t i o n of the i n v e n t o r i e s . In dea l i n g w i t h f r e i g h t - i n and any other items that go to make up the cost of s a l e s , the same procedure i s fol l o w e d . He should have learned from h i s sk e l e t o n a n a l y s i s that he i s saying, as a whole, of the account, what he i s l a t e r to say i n much more d e t a i l - 39 -of other accounts that r e q u i r e a more minute a n a l y s i s . His a n a l y s i s of the s a l a r i e s ' account should give him an opportunity f o r observing the e f f e c t i v e n e s s of the d e t a i l e d a n a l y s i s that he i s doing. For example, he l i s t s the names of the i n d i v i d u a l s who are i n r e c e i p t of the s a l a r i e s , he a s c e r t a i n s the amounts received monthly and m u l t i p l i e s them by the number of months f o r which the v/ork i s being done; h i s t o t a l should agree w i t h the ledger balance. This i s an i l l u s t r a t i o n of how he can analyse an account, b r i n g i t i n t o agreement w i t h the ledger balance and yet not n e c e s s a r i l y understand completely. He may not r e a l i z e f o r some time, consci o u s l y , that he i s s t i l l "showing the bookkeeping" and at the same time g i v i n g , i n a much condensed form, f u l l p a r t i c u l a r s of the contents of ledger pages, which themselves may show meaningless t o t a l s . There are c e r t a i n accounts i n the p r o f i t and l o s s s e c t i o n i n which e r r o r s are.more l i k e l y to be found than i n any othe r s , errors of commission, by i n t e n t i o n or otherwise. For example, the bookkeeper may have c e r t a i n items and not know to "which account they should be charged, or he may have something he wants to conceal or, again he may want to prevent c e r t a i n accounts from appearing too l a r g e . The aud i t o r ' s working papers are designed to a n t i c i p a t e such a c o n d i t i o n . The j u n i o r , of course, i s not - 40 -cognizant of t h i s at f i r s t . He w i l l analyse one of these accounts, such as miscellaneous expense account, or o f f i c e expenses, or general expenses, and i l l observe that the previous working papers c a l l f o r minute d e s c r i p -t i o n of every item contained t h e r e i n . So long as there are no unusual items i n t h i s account,-he may be permitted to f o l l o w b l i n d l y what has been done i n the past. An item may have to be of very unusual nature to a t t r a c t h i s a t t e n t i o n the f i r s t time. However, whatever i s con-t a i n e d i n the account i s shown on h i s working papers and, even though he may not recognize that a c e r t a i n item i s not pr o p e r l y chargeable t h e r e t o , h i s s e n i o r , upon examination of h i s working papers subsequently, w i l l do so. As was formerly s t a t e d , the form of a n a l y s i s i s shown by the previous papers that he-is to f o l l o w , so that he has no p a r t i c u l a r - problem i n t h i s respect. In f a c t , I t Is so c l e a r l y set f o r t h t h a t , again, i t i s l i k e l y to l e a d him away from "showing the bookkeeping". In an a n a l y s i s of such accounts as taxes, h i s schedule may c l o s e l y resemble the ledger sheet, and here, i f the bookkeeper f o l l o w s c o r r e c t p r i n c i p l e s , which i s by no means always the case, he i s able to see more c l e a r l y that he i s dealing w i t h bookkeeping and not merely l i s t -i n g f i g u r e s . In t h i s account he w i l l see only a few e n t r i e s which he copies on to h i s schedules i n the pre-scribed form. He w i l l show, f o r example, the other side of the entry , reserve f o r taxes, and d e s c r i p t i o n , say, p e r i o d i c p r o v i s i o n f o r land taxes, the d e t a i l s of the property i n v o l v e d . I f the payment of taxes has a c t u a l l y been charged to t h i s account, he w i l l show the other side of the entry - Cash - the C i t y of-Vancouver - and a des-c r i p t i o n of what the payment i s f o r , such as, taxes on l o t twelve, block s i x t e e n , and the period. I f property i s held j o i n t l y w i t h another party, who remits the taxes f o r the company to pay, he may show i t as f o l l o w s -Vancouver Manufacturing Co., (being the other side of the entry,) and - Cash i n payment of t h e i r proportion of taxes on the f u l l y described property, (being the d e s c r i p t i o n of the Transaction). His a n a l y s i s of rent account may show-rent paid to s e v e r a l i n d i v i d u a l s and the p e r i o d . He may, i n f o l l o w i n g the l a s t working papers, where no i r -r e g u l a r i t i e s occur, overlook the f a c t that the payment date has been a l t e r e d . However, h i s schedules w i l l show t h i s f a c t and h i s senior w i l l draw h i s a t t e n t i o n to the-oversi g h t . I t Is i n such accounts as t h i s that he should recognize the reason f o r some of h i s c a l c u l a t i o n s of accrued items, f o r h i s a n a l y s i s shows rent paid f o r eleven months; and he i s brought to r e a l i z e t h a t , i f no charge has gone through f o r the twelve months, the l i a b i l i t y t h e r e f o r - i n other words, the other side of the entry - ha not been set up. In h i s a n a l y s i s of the insurance account he . i s doing work more c l o s e l y resembling work that he w i l l do l a t e r i n a n a l y s i s of. balance sheet accounts. Here he shows the name of the insurance company to whom the premium was paid a n d . f u l l p a r t i c u l a r s concerning the p o l i c y , such as the s e r i a l number and such p a r t i c u l a r s as "were p r e v i o u s l y stated i n de a l i n g w i t h prepaid insurance. He i s now able to connect up i n h i s mind the r e l a t i o n s h i p between t h i s account and the work that he has- p r e v i o u s l y done, perhaps somewhat b l i n d l y . He i s expected to trace the p a r t i c u l a r s of the p o l i c i e s from t h i s account to the schedule o f prepaid insurance and to mark them as so checked. He w i l l f i n d c e r t a i n of the p o l i c i e s on'the l i s t of prepaid insurance, unmarked, which he w i l l be able to mark by reference to previous years' working papers. I f he s t i l l f i n d s items unmarked on the prepaid Insurance schedule, he may discover that he has examined p o l i c i e s , the l i a b i l i t y f o r which has not been set up. He may f i n d on h i s a n a l y s i s schedule some items unmarked. These may represent p o l i c i e s that have been omitted from the l i s t of prepaid insurance. D e s c r i p t i o n and Discussion of Method of  Learning to Carry Out a Complete Audit The j u n i o r as yet has not been given a complete aud i t to do, i n the f u l l sense of the word, although to a c e r t a i n extent he has, i n one way or another, completed sec t i o n s of work which, i f put together, might almost be considered an a u d i t . He has v e r i f i e d the existence of c e r t a i n assets and l i a b i l i t i e s and has been t r a i n e d so that he may be ready to s t a r t to do an audit h i m s e l f . "' We have observed that i n each department of h i s work there was a l a c k of consciousness of the l o g i c a l processes i n v o l v e d , and al s o that he was slowly acquiring knowledge about which he was subsequently to reason and which he-was'to f i t i n t o a scheme that represented h i s understanding of the work as a whole. We are no?/ about to observe the manner i n which t h i s consciousness takes form. We w i l l a l s o observe that i t i s not u n t i l he has t h i s consciousness that he i s able to do h i s most e f f e c t i v e work. He i s about to adopt a t h i n k i n g or reasoning a t t i t u d e regarding h i s own work, encouraged by a s i m i l a r a t t i t u d e toward h i s j u n i o r and by the desi r e to do work, as f a r as p o s s i b l e , that i s above c r i t i c i s m . This was t r u e , of course, t o some degree of the work that has been p r e v i o u s l y discussed, but, the awareness u s u a l l y came a f t e r he had passed through h i s period of t u i t i o n , when - 44 -i t was of l i t t l e value to him i n doing the work. He Is now passing i n t o a phase where the mind draws from i t s storehouse a l l the experiences and knowledge that i t has accumulated and b u i l d s i t together i n t o a whole. He i s passing i n t o that stage of mental a c t i v i t y which, though c h a r a c t e r i s i n g h i s work to some degree i n the past w i t h regard to the p a r t s , now becomes true of both the part and the whole. He reaches a stat e where, r e f l e c t i n g , Yifeighing, and balancing, play a more fundamental r o l e than ever before. He w i l l begin to discover now that everything t h a t he has been doi n g has been leading toward some goa l . He w i l l become p r o f i c i e n t i n work t h a t may never again be expected of him except, perhaps, as a c r i t i c . This c o n s t i t u t e s t h e most basic c r i t i c i s m of the manner i n which he has been t r a i n e d , f o r t h i s awareness and consequent p r o f i c i e n c y should have been reached at a time when i t would have been u s e f u l i n the work he had been doing. The f i r s t important discovery that i s made i n t a k i n g up a small a u d i t , i s t h a t the t r i a l balance gives him h i s s t a r t i n g p o i n t . I t also serves as a guide and gives him, to a c e r t a i n degree, a knowledge of h i s p o s i t i o n i n r e l a t i o n to the work. This i s an important f a c t o r , f o r as he analyses or v e r i f i e s the accounts he marks them o f f on the t r i a l balance. The items that are un-marked represent the work that i s not done. The previous - 45 -working papers a l s o serve to guide him. The working papers are arranged i n the order In which the accounts a-re arranged on the balance sheet. In undertaking h i s work he f o l l o w s these papers ana, t h e r e f o r e , the order i n which he examined the accounts i s determined i n t h i s way. The accounts on the t r i a l balance are seldom found to be i n the same order as they appear i n the working papers, > In the ma j o r i t y of cases, the accounts are arranged i n the general ledger In a l p h a b e t i c a l order and consequently appear t h i s way on the t r i a l balance. I t i s true that i n such cases where the accountant i s w e l l t r a i n e d , the accounts In the general ledger may be arranged i n balance sheet order and h i s t r i a l balance w i l l , t h e r e f o r e , a l s o appear that way. The balance sheet of the a u d i t o r , however, i s not o f t e n found to have the same arrangement .as that of h i s c l i e n t . The system, t h e r e f o r e , w i t h which the j u n i o r sets about h i s work Is determined by these two f a c t o r s - the number of accounts as shown on the t r i a l balance and the order In which he proceeds to v e r i f y them, as i n d i c a t e d by the previous working papers. This i s an important c o n s i d e r a t i o n f o r , though he may not have anyone a c t u a l l y s upervising him u n t i l h i s work Is completed, he always knows how much Is to be done and the order In which to do i t . Each schedule i n the previous working papers i n d i c a t e s how much work i s to be done on any p a r t i c u l a r account and, as was p r e v i o u s l y s t a t e d , l i t t l e d i f f i c u l t y w i l l be encountered, because at some time he w i l l have had experience on almost a l l of the accounts. The main d i f f e r e n c e between the work that he i s no?/ doing and that which has p r e v i o u s l y been done,lies i n the f a c t t h a t , i n the past, i f he were i n troub l e w i t h any p a r t i c u l a r account, he could r e f e r to h i s se n i o r . Now he i s , i n a sense, the senior and must solve the problems himself. His work on the accounts has 'gradually brought him to a state where he can do t h i s , f o r , i n a more p a r t i c u l a r way, h i s development has been such that he could f i n a l l y solve the problems that arose i n whatever he was doing. He w i l l have" a j u n i o r a s s i s t i n g him and here h i s t r a i n i n g takes on a newer aspect, f o r he now assumes the r o l e of i n s t r u c t o r . In analyzing and e x p l a i n i n g the problems that are placed before him by h i s j u n i o r , a higher degree of awareness of t h e i r s i g n i f i c a n c e dawns upon him. In the' past, he may not have recognized the existence of a f o r e s t , f o r he was concerned with a t r e e . His concern w i t h the tre e tended to shut out a more synthe-t i c comprehension of the f o r e s t as a whole. In h i s nev/ r o l e he i s c o n t i n u a l l y c a l l e d upon to exercise a sense of p r o p o r t i o n and perspective that formerly was provided, to a great extent,for him. He now al s o becomes an auditor of an a u d i t o r , f o r i t i s h i s duty to review the work that i s done by h i s a s s i s t a n t and c r i t i c i s e i t . This a l s o serves to broaden h i s understanding and knowledge of the work that i s being done. I f he f a i l to note an omission or error on the papers of h i s j u n i o r , i t w i l l be discovered l a t e r by some-one senior to him and w i l l r e f l e c t upon him. He must, t h e r e f o r e , be j u s t as c a r e f u l i n h i s review of work given to him as i n h i s own work. An e f f o r t of concentration i s always required i n t h i s respect, as i t i s easy to take f o r granted that the work of h i s j u n i o r i s s a t i s f a c t o r y , w i t h -out c a r e f u l l y examining i t . When h i s own work i s completed he must review i t w i t h t h i s same a t t i t u d e , attempting to discover omissions or er r o r s and l o o k i n g f o r p o s s i b l e s i t u a t i o n s t h a t may r e q u i r e adjustment. As the work proceeds, he keeps a schedule f o r h i s own use, showing work that has yet to be completed on c e r t a i n accounts, e r r o r s that may need adjustment, and any inf o r m a t i o n that may subsequently re q u i r e to he reported on. In a d d i t i o n to the working papers, he i s now required to prepare a d j u s t i n g j o u r n a l e n t r i e s , balance sheets and statements of p r o f i t and l o s s . Adjusting j o u r n a l e n t r i e s contain the adjustments of the accounts which are f i n a l l y considered necessary by him. When these adjustments have been discussed w i t h the c l i e n t , they are given e f f e c t i n the accounts and throughout the working papers. • Every j o u r n a l entry represents a problem. He has to decide where the c o r r e c t i o n i s to be made and what accounts are in v o l v e d , and he must give a proper explana-•r t i c n of the nature of the adjustment. I n h i s d i s c u s s i o n w i t h the c l i e n t as to the a d v i s a b i l i t y of the entry, new demands are a l s o made of him, f o r h i s c l i e n t may ask him f o r the j u s t i f i c a t i o n f o r the change. In drawing up balance sheet and p r o f i t and l o s s accounts, of course, he continues to f o l l o w the previous working papers. However, there i s always some new item t h a t has not appeared before and which w i l l now represent a problem to him, upon which he should obtain advice. I t Is by the continuous work that he does i n preparing statements,.and In f i n d i n g answers to the problems that a r i s e , that h i s p r o f i c i e n c y i n t h i s work i s developed. He f i n d s that statements vary on every type of work that he does; and i t i s not u n t i l a f t e r years of p r a c t i c e that he i s able to complete the work without reference to some higher authority.„ When the balance sheet and p r o f i t and l o s s statement have been prepared, the work of w r i t i n g the report or l e t t e r s i n connection w i t h what has been done . i s r e q u i r e d . No s p e c i a l t r a i n i n g has been received i n t h i s respect, with the p o s s i b l e exception of w r i t i n g notes on v e r i f i c a t i o n work that has been done and synopses of minutes or work of a s i m i l a r nature. The previous educa-- 49 -t i o n that has been r e c e i v e d . i s . o f more importance i n t h i s respect than i n any other. A good education In the w r i t i n g of E n g l i s h i s indispensable. In a d d i t i o n , a knowledge of the t e c h n i c a l language of the p r o f e s s i o n must be acquired. Reports q u i t e o f t e n resemble word f o r word those that were w r i t t e n on the previous audit but w i t h the dates and f i g u r e s a l t e r e d . A paragraph here or there may be completely new, but i t i s ofte n p o s s i b l e to make reference to some other r e p o r t f o r the wording t h a t may be used. Unusual reports are never expected u n t i l the experience and t r a i n i n g of the person w r i t i n g them j u s t i f i e s such procedure. In a d d i t i o n to the r e p o r t , l e t t e r s are w r i t t e n d e a l i n g w i t h c e r t a i n routine matters. These l e t t e r s are stereotyped, and the form used on previous , occasions i s u s u a l l y adequate. - 50 -- XIV -.General Discussion  of the Learning of D e t a i l V e r i f i c a t i o n . We have considered the nature of that which i s looked upon as " d e t a i l work" x and which forms the founda-t i o n of the.junior's accounting'knowledge. We have des-c r i b e d the nature of the work. In de a l i n g w i t h a d d i t i o n s and extensions, we saw tha t the work was done under such s u p e r v i s i o n that nothing but a knowledge of simple a r i t h m e t i c was necessary, and that a secondary knowledge was being a s s i m i l a t e d , namely, f a m i l i a r i t y w i t h various accounting forms. The j u n i o r i s s t a r t e d on t h i s work f o r one reason, which may or may not have a connection w i t h a co n s i d e r a t i o n f o r h i s t r a i n i n g , because of i t s s i m p l i c i t y and the f a c t that no previous knowledge i s required. When he i s doing i t no attempt i s made t o show hirc, or to as-c e r t a i n i f i t i s worthwhile showing him, the part h i s work Is p l a y i n g or the f a c t that i t i s an i n t e g r a l part of a l a r g e r reasoning process. This l a c k of regard f o r the development of the consciousness of the reasoning process involved i n t t h e work i s f u r t h e r e d by the f a c t that each part i s a s e c t i o n unto i t s e l f . The j u n i o r may have become thoroughly ^ This i s a t e c h n i c a l expression which means both a d e t a i l e d v e r i f i c a t i o n and the v e r i f i c a t i o n of d e t a i l . - 51 -p r o f i c i e n t i n c a r r y i n g out the d e t a i l e d i n s t r u c t i o n regarding the work on cash balances, but i t may be some time before he r e a l i z e s the f a c t of the existence of one of the items on the balance sheet. I t i s q u i t e possible f o r him to complete h i s work without t h i s understanding. In other words, he may f o l l o w the procedure c a r e f u l l y , and do the work thoroughly and not know what he has done. This a l s o becomes apparent when we consider again h i s work on the i n v e n t o r i e s . This work d i v i d e s i t s e l f i n t o two c l a s s e s , that where he f o l l o w s w r i t t e n i n s t r u c t i o n s as to checking and that where he prepares schedules. In the f i r s t case, he has a ro u t i n e procedure to f o l l o w , such as checking c a l c u l a t i o n s or comparing inventory sheets w i t h o r i g i n a l inventory t i c k e t s . I t i s q u i t e p o s s i b l e f o r him to do these things without knowing why he i s doing them. This i s j u s t as true of the other work o u t l i n e d . In the preparation of inventory schedules, he f o l l o w s a d e f i n i t e form. He does not know why t h i s form i s d i f f e r e n t from that used on another inventory, or that every column and n o t a t i o n i t d i r e c t s him to- complete has an important place i n the l o g i c a l processes back of the work. We found i n the work on accounts and b i l l s r e c e i v a b l e that same automatic f o l l o w i n g of i n s t r u c t i o n s . We saw that i t was p o s s i b l e f o r him to age the accounts and afterwards a s c e r t a i n that they had been pa i d , by f o l l o w i n g h i s i n s t r u c t i o n s i n the order that they appeared on the working papers and not i n the order that an under-standing of the reason f o r h i s work would I n d i c a t e . I f he had before him "the f a c t that these were d i f f e r e n t methods of e s t a b l i s h i n g the same f a c t , he would not use both. He would s e l e c t the more e f f e c t i v e and omit the other. We have pointed out that the preparation of schedules, d e a l i n g w i t h i n v e n t o r i e s , b i l l s r e c e i v a b l e and prepaid and accrued items, involved c a r e f u l l y thought-out methods of e s t a b l i s h i n g c e r t a i n f a c t s by reasoning. The d e t a i l s or premises appearing on the schedules were con-firmed by reference to some a u t h o r i t a t i v e document, and the c o n c l u s i o n , which r e s u l t e d i n a balance which appeared on the f i n a n c i a l statement, was worked out on these schedul and the reasoning c l e a r l y shown. The -work may have been done many times u n t i l the form, which i s somewhat stereo-typed, was completely memorized. He may not r e a l i z e he has been reasoning. He has memorized a p a t t e r n , which i s always used on s i m i l a r types of work. I t would be much more b e n e f i c i a l to him i f he were shown the extent to which he was reasoning, and that t h i s reasoning i s c h a r a c t e r i s t i c of the general nature of the whole of the work that he i s doing. He should be shown the r e l a t i o n s h i p that the reasoning on each s p e c i f i c type of 'work bears to the whole, a r e l a t i o n s h i p t h a t e v e n t u a l l y occurs to him, a f t e r he has passed a long way on, but which i s not d e f i n i t e l y and i n t e n t i o n a l l y placed before him. . When the j u n i o r i s given work on c a l c u l a t i o n s h i s i n s t r u c t i o n s save him the ne c e s s i t y of wondering what he has to do. He has nothing to reason out f o r h i m s e l f . He merely adds or m u l t i p l i e s , as the case may be, what-ever data are submitted to him. I f , however, he has done s i m i l a r work before, he may be given some sheets w i t h the f o l l o w i n g c u r t request, "Check t h i s " . He marks h i s work, I n d i c a t i n g what he has checked. Very o f t e n the work must be handed back to him and the f a c t pointed out that i t i s imcomplete. In t h i s way he gra d u a l l y l e a r n s that when he i s given anything to do i t must be completed. So t h a t , even i n work as elementary as t h i s , where i t would appear tha t there i s small place f o r t r i a l and e r r o r , t h i s i s the way he l e a r n s . " I f he be above the average i n i n t e l l i g e n c e he i s l i k e l y to ask f o r s i m i l a r sheets on the previous audit and f o l l o w them. He reaches a stage, at l e n g t h , when he teikes i n t o c o n s i d e r a t i o n the whole of h i s small assignment and .is able to complete i t s a t i s f a c t o r i l y . The o b j e c t i o n to t h i s method of l e a r n i n g i s that he com-pl e t e s numerous assignments before he reaches an under-standing that he coula have had much e a r l i e r i f the trouble were taken t o i n s t r u c t him. As f o r h i s a c q u i r i n g a f a m i l i a r i t y w i t h various - 54 -kinds of records, t h i s i s done without r e c o g n i t i o n of the f a c t that l e a r n i n g i s an a c t i v e f u n c t i o n . I f the various •t records were placed before him, and he were required to answer questions prepared w i t h the object of e x e r c i s i n g h i s mind on the importance of the v a r i a t i o n s , i n order that he might grapple w i t h them as problems, there i s l i t t l e doubt as to the improvement th a t would r e s u l t . The same th i n g Is true of h i s work on the cash balances. He obtains a schedule showing the work he i s going to do and f o l l o w s i t . When he f i r s t does the work, i t i s nothing more than a l i s t . I t does not occur to him that each of the d e t a i l s of h i s l i s t has a s i g n i f i c a n c e . I f i t d i d , and he d i d not understand, he might ask why the t o t a l amount of h i s count was not shown instead of a l l the d e t a i l . He does not r e a l i z e that f o r everything he does there i s a reason. He i s so engrossed i n what he i s doing that he never thinks of enquiring i f i t be so, and what the reason may be. He works by i m i t a t i o n . He f o l l o w s the path l a i d down f o r him by the papers of the previous a u d i t , and a l s o l e a r n s by omissions and e r r o r s . I t i s apparent that c a r e f u l examination of cash work on other audits would give him a c l e a r e r consciousness of what he i s doing, and place him i n a p o s i t i o n where he would be able to examine h i s own -work i n the l i g h t of what he had been taught was necessary. He would not merely i m i t a t e h i s - 55 -predecessor. His knowledge would act as a guide to him, and he would he able to become h i s own c r i t i c , as regards wnat the important requirements were and not as to how near he was t o the previous working papers. This i s j u s t as true of h i s work on the bank balances. 1 His i n s t r u c t i o n s t e l l him to compare the d e t a i l of the d u p l i c a t e deposit s l i p s w i t h the cash book. He does not know why he i s doing t h i s . He does not r e a l i z e that he i s attempting to s a t i s f y himself that the funds of the company are i n t a c t . Even when he draws up h i s r e c o n c i l i a t i o n of the bank balance and the balance as shown by the company's cash book, he does not r e a l i z e to what extent the items he shows as outstanding are s i g n i f i c a n t . In other words, he does n o t : r e a l i z e that what he i s showing as d e t a i l on h i s work-ing papers has a s i g n i f i c a n c e that has been c a r e f u l l y thought out, and that everything he w r i t e s i s of importance, p r o v i d i n g he f o l l o w s the papers of the previous a u d i t . On h i s r e c o n c i l i a t i o n i n regard to the outstanding cheques, he shows the number of the cheque, the date and the name of the' payee. The cheque i s e a s i l y i d e n t i f i a b l e $ i f anything appears to be unusual, such as the name of the person who issued the cheque, an enquiry should be made and the r e s u l t s should be recorded on the working papers. The j u n i o r s e l -dom makes t h i s enquiry at f i r s t , unless he has been requested to ao so by h i s s e n i o r , and t h i s shows that he does not - 56 understand, i n h i s e a r l y attempts, the prime r e q u i s i t e of the work he i s doing. "t In our d e s c r i p t i o n of "vouching" we found that I t was necessary f o r the j u n i o r to have a c e r t a i n amount of knowledge w i t h which to commence the work. We of f e r e d the c r i t i c i s m that t h i s information i s u s u a l l y acquired-while doing, and at the expense of, the work. How much i s overlooked can never be known. I t i s safe to assume that i n the beginning h i s omissions are numerous and g r a d u a l l y become l e s s and l e s s . The only way that h i s omissions could be discovered would be to do the work again, which, of course, i s i m p r a c t i c a b l e . The l e a r n i n g must n e c e s s a r i l y be slower. I f i t were known, as i n the case of err o r s such as we have p r e v i o u s l y mentioned, that he had made a mistake and i t was pointed out to him, the t r i a l and e r r o r process would at l e a s t be shorter. This c o n d i t i o n . c o u l d be el i m i n a t e d i f c e r t a i n f i l e s of i n v o i c e s were kept, containing known errors which, a f t e r thoroughly e x p l a i n i n g the p r i n c i p l e s , he were t o l d to check, and afterwards each d e t a i l demonstrated and again r e l a t e d to the whole. He should have a p i c t u r e of the work that i s being done and the d e t a i l s that he i s required to look f o r , f i t t e d c a r e f u l l y i n t o t h i s p i c t u r e . With regard t o - h i s method of f i n d i n g . h i s way through the records, he should not be l e f t to h i s own - 57 -resources, :We have already discussed the f a m i l i a r i z i n g of the student w i t h various kinds of records. The l a t t e r could be c a r r i e d out p r o f i t a b l y i n conjunction w i t h t h i s work, and the ground-work'laid f o r p o s t i n g , which i s to f o l l o w l a t e r . The j u n i o r , i n dea l i n g w i t h i n v e n t o r i e s , i s l e f t to h i m s e l f . He must not bother h i s senior too often, and he avoids asking absurd questions. This observation can be made of n e a r l y everything he does. An advantage i s gained through the f a c t that he i s compelled, to think f o r h imself; but, on the other hand, he Is thrown Into a c o n d i t i o n where he must l e a r n by t r i a l and e r r o r , where the knowledge of the e r r o r s and the improvement that r e s u l t s therefrom are r e s t r i c t e d . In t h i s f i e l d , as i n the others, l e a r n i n g by t r i a l and er r o r cannot be eli m i n a t e d , but i t can and should be lessened. There are common e r r o r s , mistakes that every j u n i o r makes. These can be c l a s s i f i e d and by c a r e f u l i n s t r u c t i o n avoided. In each of the d i f f e r e n t c l a s s es of work there are methods common to a l l c l a s s e s . We have seen that i n vouching, the j u n i o r must have a c e r t a i n body of knowledge which he uses f o r examining the documents that he traces through the records. We saw defects i n the manner i n which t h i s knowledge was obtained and al s o i n the way he learned to apply i t . This may be s a i d to be true wherever d e t a i l e d i n s t r u c t i o n s are set,out f o r trie j u n i o r to f o l l o w , and not 30 true when he has to prepare schedules showing trie manner i n which h i s r e s u l t s are a r r i v e d a t . The l e a r n i n g i n the f i r s t case i s d i s t i n c t l y t r i a l and e r r o r l e a r n i n g , and, i n the l a t t e r , nearer to i m i t a t i o n and r e f l e c t i o n , though there i s an element of the former always present. Inventory v e r i f i c a t i o n demonstrates t h i s f a c t c l e a r l y . One part of the work Is d e t a i l checking, which i s r e a d i l y comparable to the work already discussed and can be improved by the methods suggested. The other, dealing w i t h p r i c i n g , i n v o l v e s the preparation of schedules and introduces an o b j e c t i v e medium f o r doing the work and sub-sequently examining i t . The i m i t a t i v e element i s found i n the f a c t that the j u n i o r f o l l o w s i n minute d e t a i l the schedule of work prepared on the previous a u d i t . Any er r o r s that are made are set out i n w r i t i n g , and there i s no doubt about t h e i r being discovered. As we have pointed out, i t i s q u i t e p o s s i b l e f o r the schedule to be prepared without an understanding on the part of the j u n i o r of i t s i m p l i c a -t i o n s . I t i s only a f t e r he has completed many schedules of a s i m i l a r nature that h i s work takes on a meaning as to i t s e l f and i t s r e l a t i o n s h i p to the e n t i r e v e r i f i c a t i o n work. Means have already been given whereby t h i s work can be changed from that of merely f o l l o w i n g , to that where - 59 -the j u n i o r i s able to think'more while he l e a r n s , the previous papers serving as a check and an a i d to h i s t h i n k -i n g . I t would seem to be a simple matter to inform him that he i s attempting to e s t a b l i s h the f a c t that the inventory i s valued at cost or market, whichever i s the lower, and that t h i s i s the reason he Is examining cost Invoices and sales i n v o i c e s . Yet i t i s s u r p r i s i n g to f i n d that a j u n i o r who has completed many assignments of t h i s d e s c r i p t i o n does not understand why he i s showing dates on h i s schedules and does not connect i n h i s mind the f a c t that the sales i n v o i c e s he i s recording are an i n d i c a t i o n of the current market p r i c e . I t remains f o r the senior to examine h i s f i g u r e s against those of the i n -ventory t o a s c e r t a i n the fundamental f a c t concerning the v a l u a t i o n of the inventory. I t demonstrates the e f f e c t i v e -ness of the working papers, t h a t i t i s p o s s i b l e f o r t h i s to be done, but at the same time i t shows the weakness i n the t r a i n i n g of the j u n i o r . I f more a t t e n t i o n were paid to t r a i n i n g the j u n i o r , he would pass from a c o n d i t i o n where he i m i t a t e d h i s predecessor and would adopt the a t t i t u d e , towards h i s own work, that h i s senior had done. We have drawn a t t e n t i o n to the f a c t , p a r t i c u l a r l y i n connection w i t h i n v e n t o r i e s , that the work u s u a l l y d i v i d e s i t s e l f i n t o two parts - that where d e t a i l checking i s done and where l i t t l e t h i n k i n g may be necessary, and that where - 60 -c e r t a i n conclusions are .arrived* at and where a great deal of t h i n k i n g i s necessary. This i s ' t r u e of work on accounts and h i l l s r e c e i v a b l e . In the d e t a i l work, notes are made on the schedules of dates, amounts paid and such information as w i l l lead to the formation of an opinion as to the value of the asset and a l s o as to I t s existence. This i s a case where, owing to the demands of the work, the system of the work and the t r a i n i n g of the j u n i o r go hand i n hand, because h i s work and h i s thoughts are w r i t t e n down and any information that i s wanting i s asked f o r and anything that i s unnecessary e l i m i n a t e d . He cannot so o f t e n f o l l o w what has gone before, because new c o n d i t i o n s , r e q u i r i n g new treatment, demand that he must reason things out. The 'second part of the work depends upon the f i r s t . He must form an op i n i o n from the information he has shown on h i s papers. In t h i s work, then, h i s l e a r n i n g i s more a c t i v e than elsewhere. The same c r i t i c i s m can be made here as was made i n regard to the' l e a r n i n g of vouching - that he learns too much while he i s doing the work. I t i s true that h i s progress i s more r a p i d here than elsewhere, but that i s because the nature of the work demands that he must t h i n k about what he i s doing. Nevertheless,.he d i s -covers, to too great an extent, by e r r o r s or omissions the nature of the work and i t s r e l a t i o n s h i p to the balance sheet. I t would -be a simple matter to i n d i c a t e to him beforehand - 61 -the importance of the d e t a i l s and t h e i r connection w i t h the o b j e c t i v e ; i n other words, to give him a r e a l i z a t i o n of the p a t t e r n of reasoning n i s mind i s unconsciously making. Some of the p i t f a l l s i n t o which he i s l i k e l y to stumble have been i n d i c a t e d . The extent to which a l l j u n i o r s commit the same f a u l t s makes them almost standard e r r o r s . The manner i n which these e r r o r s may be lessened, i f not e l i m i n a t e d , has been.discussed. A greater e f f o r t should be made to b r i n g these e r r o r s to h i s n o t i c e . This Is done to a great extent when he i s preparing schedules, f o r these are always reviewed and h i s mistakes pointed out to him. We have seen t h a t , due to h i s l a c k of understand-ing of the o b j e c t i v e s ana the reasoning of h i s work, i t i s p o s s i b l e f o r him to make err o r s of omission without t h e i r being discovered; and we i n d i c a t e d means whereby t h i s may be somewhat corr e c t e d . In the d e t a i l work.that does not appear on schedules, t h i s i s a more d i f f i c u l t problem, f o r , as we saw, i t i s not p o s s i b l e to know what errors are made, 'we saw that the j u n i o r must make h i s own mark on everything-he does, and that the senior subsequently reviews h i s work to see that a l l Items have been marked. I t oft e n happens that the senior c o r r e c t s the omission but f a i l s to point i t out to the j u n i o r . This should not be the case. The j u n i o r should be informed of a l l e r r o r s that he makes. - 62 -Though i t i s obviously not p o s s i b l e to place the e r r o r s before the mind of the j u n i o r i n such cases where these are not known, t h i s c o n d i t i o n can be met to some degree on the basis o u t l i n e d i n d e a l i n g w i t h d e t a i l checking, where i t was suggested t h a t sample i n v o i c e s be kept with known er r o r s on them so that the j u n i o r might be t r a i n e d t i l l he reached p r o f i c i e n c y . The nature of the t r a i n i n g would demand that a l l the e r r o r s come under h i s observation. The method of l e a r n i n g described n a t u r a l l y lends i t s e l f to l e a r n i n g of a passive nature, I f t h i s expression may be used to Indicate that form of l e a r n i n g where the mind i s l e s s a c t i v e than i n the more e f f e c t i v e form. A l l l e a r n i n g , of course, i s a c t i v e , but there are v a r y i n g degrees o f a c t i v i t y . The expression i s used to i n d i c a t e a d i f f e r e n c e not i n q u a l i t y but i n degree. We can observe t h i s c l e a r l y i n cash and bank v e r i f i c a t i o n . We saw that he d i d not have a consciousness of the o b j e c t i v e s of h i s work or of the reasoning whereby • i t had been planned. In f o l l o w i n g the previous papers, nothing was l e f t t o h i s imagination. He followed a routine procedure and l i s t e d the items i n the same order that they appeared on those .papers. He was given simple classes of work,' so there wqs l i t t l e l i k e l i h o o d of problems a r i s i n g that would make him t h i n k . A f t e r having aone the work a s u f f i c i e n t number of times the form became memorized. I t was u s u a l l y when he f a i l e d to f o l l o w the previous papers th a t he made an e r r o r , the discovery of which served to a c c e l e r a t e the speed with which he learned the form. But i f he were c a r e f u l , there might have been no occasion f o r c r i t i c i s m ; and h i s l e a r n i n g was dependent upon the number of times he was able to repeat the same operation. The same c o n d i t i o n e x i s t s when he i s r e c o n c i l i n g bank balances. We saw t h a t there i s l i t t l e n e c e s s i t y f o r c o n s t r u c t i v e . t h i n k i n g . I t i s true he i s expected to keep h i s eyes open, but no one knows to what extent he does t h i s , not even he h i m s e l f . I t i s only by r e p e t i t i o n of s i m i l a r kinds of work and a growing consciousness of t h e i r meaning that he i s able to "watch properly f o r such things as the date, the name of the payee and the signatures. When h i s work i s o b j e c t i v e l y d i s p l a y e d on the working papers, there i s some p o s s i b i l i t y of checking him, but only when something of an unusual nature a r i s e s and he i s unable to deal w i t h i t . He gets simpler r e c o n c i l i a t i o n s to do at f i r s t so that h i s l e a r n i n g i s acquired through r e p e t i t i o n and memorization, depending on the number of times he does the work. As the work becomes more complicated c e r t a i n problems a r i s e , such as have been i n d i c a t e d , where the l e a r n i n g tends to become more a c t i v e and consequently quicker. For the same reasons, i t i s not possible to know how e f f e c t i v e h i s work i s when he i s vouching. His knowledge i s never o b j e c t i v e l y brought out u n t i l some error - 64 -i s made. How c l o s e l y he i s observing that vouchers are p r o p e r l y signed, that they are on the c r e d i t o r ' s own form, that they are being r e g u l a r l y p a i d , that they are properly addressed, that the s e v e r a l signatures of approval are shown and' other s i m i l a r i n f o r m a t i o n , i s never ascertained. An examination of the present basis of h i s t r a i n i n g would i n d i c a t e that.he does a good many assignments i n order to l e a r n t o perform t h i s complex mental operation s a t i s f a c t o r -i l y . A method has been suggested to avoid t h i s . I t i s enough to point out here that h i s l e a r n i n g Is of a passive nature and t h a t considerable time must elapse before he becomes p r o f i c i e n t . When he i s doing h i s d e t a i l checking of- invent-o r i e s there i s the same p o s s i b i l i t y of o v e r s i g h t . The work i s of a tiresome nature, and, unless he i s stimulated by a c l e a r understanding and knowledge, i t can be l i t t l e more than a r i t u a l to be completed as soon as p o s s i b l e . How can he keep h i s eyes open f o r slow moving m a t e r i a l , discontinued products, damaged products, f i c t i t i o u s b i l l i n g s ; how i s he able to know that merchandise b i l l e d to customers i s excluded from the inventories,, that the i n v o i c e s are i n order, that the goods are a c t u a l l y shipped, i f he i s not made thoroughly conversant w i t h the o b j e c t i v e s of h i s work beforehand? I t must be remembered that he must have a knowledge of these requirements r e a d i l y at hand i n order to carry out the work - 65 -e f f i c i e n t l y . He learns to do t h i s c l a s s of work i n the same manner as that described elsewhere; he learns while he i s doing the work, not before he does i t . His conscious-ness of the requirements grows i n t h i s way, and i s imperfect u n t i l considerable work has been done. We have seen that he must record the information he received i n connection w i t h v e r i f i c a t i o n of p r i c e s on h i s schedules, and a means i s thereby given f o r checking him. E r r o r s and oversights -i n t h i s case can be detected and r e c t i f i e d . However, we al s o saw that the next inventory that he receives may.be e n t i r e l y d i f f e r e n t , so that whatever he has learned by having been faced by the c o r r e c t i o n of some er r o r may be fo r g o t t e n before he i s given something s i m i l a r to do again. Years may pass before he l e a r n s to do the work properly. He may n o t l e a r n u n t i l he i s showing someone el s e the cor r e c t way to do i t , when some of the things he should have known may occur to him. In the l e a r n i n g i n connection w i t h accounts and b i l l s r e c e i v a b l e , i t i s not p o s s i b l e f o r the j u n i o r to get very f a r without having done much t h i n k i n g . I t i s truei,. of course, that a great deal of valuable information may not have been recorded and that what t h i s information i s may never be discovered. I t i s also p o s s i b l e to give unnecessary inf o r m a t i o n . The only way to c o r r e c t t h i s c o n d i t i o n i s to shorten the length of time that i t takes at present f o r the ju n i o r to understand what he i s s t r i v i n g f o r . In h i s l e a r n -- 66 -i n g , as we have described i t , t h i s i s brought to h i s a t t e n t i o n by c r i t i c i s m . I f there i s no c r i t i c i s m and the work i s s t r a i g h t f o r w a r d and along the l i n e s i n d i c a t e d by the papers he i s f o l l o w i n g , the l e a r n i n g i s l e s s a c t i v e i n the same sense as has been p r e v i o u s l y pointed out. He may neglect to show such p e r t i n e n t i n f o r m a t i o n as the c r e d i t terms, that the customer i s In f i n a n c i a l d i f f i c u l t y , that the account has not been passed f o r c o l l e c t i o n by a t h i r d p a r t y , or that there i s p o s s i b l e pending, l i t i g a t i o n a f f e c t -ing the c o l l e c t i b i l i t y of the account, or that i t i s i n dispute. The checking of l i s t s of accounts payable to the ledgers and postings i s among the most mechanical work that the j u n i o r i s required, to do, and he does enough of i t to become r a p i d and accurate. The mental a l e r t n e s s that i s required when he i s doing the checking.is another matter and i s subject to the, same c r i t i c i s m s as were made above. There i s room f o r improvement i n regard to the preparation of a l l l i s t s , whether of notes payable, accrued or prepaid items. We saw that valuable information that may be discovered while preparing these l i s t s i s i n e f f e c t i n c i d e n t a l to the main o b j e c t i v e . I t Is p o s s i b l e , through met i c u l o u s l y f o l l o w i n g the previous papers, to complete the assignment and not discover the secondary information. This i s due to the f a c t that the j u n i o r ' s l e a r n i n g i s acquired - 67 -by i m i t a t i o n of former work and not n e c e s s a r i l y by reason-ing about i t , except that he does consider how near I t i s to the model he has before him. Though there may be l i t t l e p o s s i b i l i t y of the primary object of these l i s t s not being a t t a i n e d , i t i s p o s s i b l e f o r such secondary information, as to whether or not money i s being borrowed on mortgages f o r v l i i c h no record has been made, or of an outside I n t e r e s t and the l i a b i l i t y consequent ther e t o , to be overlooked. We saw that i n making h i s notes on accounts r e c e i v a b l e he must give information that w i l l permit the formation of an opinion as to whether or not the accounts are d o u b t f u l . At present there i s no d e f i n i t e way that he may go about t h i s except by f o l l o w i n g h i s predecessor's work. We have c i t e d c e r t a i n questions that he could have before him when he does h i s work, such as - What are the c r e d i t terms? Is the customer i n f i n a n c i a l d i f f i c u l t y ? Has the account been pro p e r l y passed f o r c o l l e c t i o n by a t h i r d party? Is i t i n dispute? Is there possible pending l i t i g a t i o n a f f e c t i n g the c o l l e c t i b i l i t y of the account? and other s i m i l a r questions. At present the questioning of an account i s occasioned c h i e f l y by i t s age. Care . should be taken to e s t a b l i s h i n the mind of the ju n i o r what the requirements are, and to Indicate c l e a r l y the paths th a t he may f o l l o w , making him conscious beforehand of a d e f i n i t e procedure. V e r i f i c a t i o n work cannot be done properly unless the j u n i o r i s always c a r e f u l l y attending to what he i s doing, "We have given numerous i l l u s t r a t i o n s of t h i s . Mien we consider the number of things that he must keep i n mind when he i s vouching or doing d e t a i l bank work, posting or anything of a s i m i l a r nature, we see that he i s being d r i l l e d i n the formation of a habit of' attending. He must c r i t i c i z e every item that he i s examining w i t h c e r t a i n i n -formation before h i s mind. He does t h i s a. great number of times i n the course of h i s work. The information that we have described should be placed before him In the beginning, and not be learned d u r i n g , and at the expense of, the work, i f t h i s h a b i t of a t t e n t i o n with regard to the p a r t i c u l a r f i e l d i s to be properly developed. In other words, he should not s t a r t out w i t h the date of the i n v o i c e , one or two of the proper signatures i n h i s mind and add to these as he progresses. He should have a l l the data In h i s mind from the commencement. I t would appear then that some e f f o r t should be made to r e i n f o r c e t h i s very valuable aspect of h i s t r a i n i n g by developing i t more s p e c i f i c a l l y . ¥\re have observed that i n part of the work, such as where the j u n i o r i s preparing schedules that may be examined subsequently, h i s errors are shown. In order to avoid t h i s c o n d i t i o n he concentrates on reproducing as nearly as p o s s i b l e the form of the previous working papers. - 69 -His understanding of what i s expected of him i s not s u f f i c i e n t , when he commences the work, 'to l e t him do any-th i n g hut f o l l o w c a r e f u l l y the form l a i d out f o r him. He i s developing a h a b i t of a t t e n t i o n on the p a r t i c u l a r thing that he i s doing; but the th i n g he i s doing i s not primary, but secondary - tha t i s to say, h i s e f f o r t s are d i r e c t e d towards copying and not towards s a t i s f y i n g himself that the requirements that should have been placed before h i s mind beforehand, are complied w i t h . - 70 -- X V -General Discussion  of. the Learning; of More Advanced Work  Leading- up to the completion of an Audit We have drawn s p e c i a l a t t e n t i o n to the f a c t that i n d ealing w i t h the a n a l y s i s of accounts, the c h i e f r e q u i r e -ment as the j u n i o r l e a r n s its, i s to " f o l l o w the bookkeeping" He must f o l l o w i t because,.in recording on h i s papers the bookkeeping, he i s showing -the nature of the tr a n s a c t i o n s that have a r i s e n . Whether or not he i s able to understand them, whoever examines h i s work subsequently must be able to determine the correctness of the e n t r i e s that are made. The f i r s t o b j e c t , then, f o r him i s to show c o r r e c t l y what e n t r i e s have been made, to understand the reason f o r sho?/ing these, whether or not he i s able to form an opinion as to t h e i r correctness. The a b i l i t y to form an opinion as to the v a l i d i t y of an entry, he acquires from c r i t i c i s m of h i s working papers by a senior. The j u n i o r u s u a l l y learns t h i s work i n the same manner as he d i d that of the past i n the prepar a t i o n of schedules and l i s t s . He meticulously follows previous papers. His concern'is here, as i t was i n the cases c i t e d elsewhere, to be as near as p o s s i b l e to the form of the previous papers. The pa t t e r n Is memorized i n t h i s way, and the o b j e c t i v e s of the p a t t e r n come to him gr a d u a l l y during the process. We saw that the p r i n c i p l e i n v o l v e d i s consistent throughout the -whole of t h e ' a n a l y s i s , - 71 -.namely, to i n d i c a t e the opposite side of an entry and to describe the nature of the t r a n s a c t i o n . In our d e s c r i p t i o n of the -work on c a p i t a l a s s e t s , we saw that there was a d e t a i l e d d e s c r i p t i o n , such as the name of the person or company from whom the purchase was made, and a d e s c r i p t i o n of what was purchased, or i t may have been a s t o r e s ' i s s u e , ( i n which case t h i s was shown) and what was charged i n d i c a t e d . Or again, i t may have been a p a y r o l l charge when a d e s c r i p t i o n of the nature of the -work c a r r i e d out was made. In h i s work on the a n a l y s i s of p r o f i t and l o s s items, the same p r i n c i p l e was folio-wed, though i n l e s s d e t a i l e d form. The opposite side of the entry was Indicated by some -general d e s c r i p t i o n and what was purchased or s o l d was described i n summary form. The main c r i t i c i s m of the present method of l e a r n i n g I s that the le a r n e r Is not conscious of the p r i n c i p l e r e f e r r e d to i n the preceding paragraphs u n t i l a f t e r he has completed numerous assignments. This i s evidenced i n the f a c t t h a t , the moment .he i s compelled to break away f om the previous working papers, because of something of an unusual nature, he f a i l s to s a t i s f y the requirements. He l e a r n s what i s expected i n each p a r t i c u l a r instance by being required to show the work i n proper form a f t e r i t has been c r i t i c i s e d , He di s c o v e r s , a f t e r making numerous e r r o r s , t h a t there i s a p r i n c i p l e involved. I n other words, i t occurs to him that what he i s doing i n d e t a i l i s c h a r a c t e r i s t i c of the whole of h i s a n a l y s i s , • This r e l a t i o n s h i p should not be l e f t f o r the learner to d i s -cover i n h i s own way, but should be placed before him before the work commences and whenever an e r r o r i s made. In order f o r him to become a judge of the p r o p r i e t y of the e n t r i e s , he must discover c e r t a i n character-i s t i c s t h a t d i f f e r e n t i a t e one entry from another. He must l e a r n the d i f f e r e n c e between an entry that a f f e c t s c a p i t a l and an entry that a f f e c t s revenue. As we saw, he learns t h i s by t h e ' c r i t i c i s m s or suggestions that are made by the senior i n examining h i s work. One of the advantages to De found i n t h i s s e c t i o n of the work i s that most of the e r r o r s come to l i g h t and are used as a means of education. Eowrever, an improvement could be made i f , vtfiehever an error occurred, he was shown that i t involved a flaw In h i s reasoning process. He should never be allowed to lose s i g h t of the f a c t that he i s e s t a b l i s h i n g , the existence and value of a balance l o g i c a l l y , and that every d e t a i l of h i s work has a place i n t h i s l o g i c . He should be aided as much as p o s s i b l e to formulate h i s thoughts on the same b a s i s . He should know, when he i s preparing a l i s t of names from share c e r t i f i c a t e stubs f o r example, th a t he i s attempting to corroborate the amount that i s shown on the balance sheet as regards the share c a p i t a l of the company, or that he i s endeavouring to prove that the company has not issued more stock than I t has been authorized to i s s u e . His work on a n a l y s i s of accounts i s an i n t r o -d u c t i o n to that which leads him to a s t a t e where a great d e a l more i s expected of him. As the d e s c r i p t i o n of the work shows, h i s a n a l y t i c a l - mental processes may be given f u l l p l a y , but to rec e i v e f u l l b e n e f i t he should be conscious of the processes. We saw that there i s a tendency f o r him to i m i t a t e , and not r e f l e c t upon what he Is doing, and suggested t h a t an e f f o r t should be made to c o r r e c t t h i s . We have pointed out that the more p r o f i c i e n t he becomes, con s t r u c t i v e t h i n k i n g or reasoning becomes more evident. The process has been from simple l e a r n i n g by t r i a l and e r r o r to that where the higher mental processes are involved. We found t h i s demonstrated i n our examination of h i s l e a r n i n g when he i s ca r r y i n g out an audit unaided. We saw that at f i r s t he has c e r t a i n guides to lead him i n new work. The procedure that he f o l l o w s i n the arrangement of the papers, he learns by i m i t a t i o n . I t would help g r e a t l y i f the work as a whole could be u n i f i e d f o r him when he reaches the p o s i t i o n where the p i c t u r e of a complete audit can be understood. He learns to draw up f i n a n c i a l statements by preparing h i s master schedules, s t r i c t l y f o l l o w i n g those of the year before. That the master schedules are copied - 74 -on the f i n a l statements i s a new discovery f o r him. As he passes from the performance of one audit to another he may •f even forget t h i s new discovery, however important i t may be. I t i s c l e a r , then, that he learns t h i s by memoriza-t i o n of a p a t t e r n varying i n the degree of i t s complexity and, correspondingly, i n the length of time necessary f o r i t s a s s i m i l a t i o n . He should have had an Idea of t h i s p a t t e r n while he was l e a r n i n g , and c a r r y out the work at i n t e r v a l s not too f a r apart. The preparation of a d j u s t i n g j o u r n a l e n t r i e s presented a s l i g h t l y d i f f e r e n t mode of l e a r n i n g . Before they are made, they are u s u a l l y discussed as to t h e i r p r o p r i e t y so t h a t , p r o v i d i n g he were given enough;of them to prepare, he would soon be able to reason them out f o r h i m s e l f . Such i s not the case. Many of h i s f i r s t audits r e q u i r e few adjustments, and he has the opportunity f o r making adjustments only o c c a s i o n a l l y , when he may have f o r -gotten what he p r e v i o u s l y learned. This, however, i s o f f -set by the f a c t that he i s again given the opportunity f o r d i s c u s s i n g and thoroughly considering every entry that is.made, both w i t h the person whose accounts he i s adjusting and w i t h someone who i s senior to him. C e r t a i n audits are c h a r a c t e r i z e d by the numerous- adjustments that i t i s necessary to make. Others'have very few. I t would be of advantage i f i t were pos s i b l e f o r the learner to be ' t r a i n e d i n t h i s exceedingly important branch of h i s profession - 7 0 by so arranging h i s work that he could s p e c i a l i s e i n making adjustments f o r a longer period. This i s a broad f i e l d , f o r i t covers a l l aspects of accounting knowledge; and, i n t r a i n i n g the beginner, there are c e r t a i n p r i n c i p l e s that should be borne i n mind i f the most s u c c e s s f u l r e s u l t s are to be obtained. Though each j o u r n a l entry i s a problem i n i t s e l f , i t has a r e l a t i o n s h i p both to what he i s doing and to accounting as a whole that he should understand. I f care were taken to i n d i c a t e t h i s r e l a t i o n s h i p , h i s knowledge i n every respect could ue considerably extended. In every case where he has been c a r r y i n g out d e t a i l work, I f he has discovered an e r r o r , the n e c e s s i t y may have a r i s e n f o r an adjustment; so that the adjustments have a connection i n t h i s way w i t h the d e t a i l work and w i l l serve as a f u r t h e r means f o r e s t a b l i s h i n g In h i s mind the objects of.; that work. The same method of t r a i n i n g that has been out-l i n e d i n connection w i t h a l l forms of v e r i f i c a t i o n work i s apparent i n the preparation of any w r i t t e n report or l e t t e r . When the j u n i o r f i r s t w rrites a r e p o r t , i t i s u s u a l l y nothing more than a copy of that which was prepared the year before. A f t e r he has w r i t t e n s i m i l a r reports a s u f f i c i e n t number of times' they become memorized, as the form of an u n c o n d i t i o n a l report i s stereotyped. Whenever there are v a r i a t i o n s , they are u s u a l l y only to be found i n a sentence or a paragraph. He l e a r n s to w r i t e these new sentences or paragraphs and g r a d u a l l y becomes able to construct a whole rep o r t . He could be a s s i s t e d i f he were i n s t r u c t e d to w r i t e r e p o r t s from the beginning on the various classes of work that he has been doing. He does not n e c e s s a r i l y know what the requirements of the report are, as he f o l l o w s the l a s t one, but l e a r n s g r a d u a l l y a f t e r he has become f a m i l i a r w i t h the form. He should be given an understanding of t h i s before he commences to w r i t e . t h e report and a f t e r i t i s completed. In carrying' out a complete a u d i t , the lear n e r reaches a p o s i t i o n where he gains a consciousness of the u n i t s of h i s audit and of t h e i r general r e l a t i o n s h i p , also the means whereby they are l i n k e d together. He does t h i s because he i s fo r c e d i n t o a p o s i t i o n where he must th i n k about a l l of the work. That consciousness which should and could be a r r i v e d at i n the a c t u a l c a r r y i n g out of d e t a i l v e r i f i c a t i o n i s acquired u s u a l l y at t h i s l a t e stage. Had i t been p o s s i b l e f o r him to have developed i n the manner suggested, he might be In a p o s i t i o n where he could form many of the judgments that are u s u a l l y l e f t to h i s p r i n c i p a l . A l l of the d e t a i l work that has been o u t l i n e d now comes i n t o h i s province, and he i s e i t h e r doing the work or c r i t i c i s i n g someone e l s e . Whichever the case may be, he now works with some understanding of a whole au d i t ; and he attempts to r e l a t e the p a r t s . There i s l i t t l e of the work that he has not done before, as f a r as the a c t u a l v e r i f i c a t i o n i s concerned. 77 -The most s i n g u l a r feature of h i s l e a r n i n g l i e s i n the f a c t t h a t he i s l e f t to h i s own resources. We saw that the path he must f o l l o w i s c a r e f u l l y marked, so that he cannot l o s e h i s way. The anomalous s i t u a t i o n i s . that he does not knot? where he i s going, and i f these marks were not before him he would be l o s t . He has l i t t l e comprehension at f i r s t of what he i s about to do, and h e r e i n l i e s the main f a u l t i n h i s t r a i n i n g . Some attempt should be made to give him a view of the f i e l d he i s about to cover. I t present he f o l l o w s , one step at a time, h i s i n s t r u c t i o n s and eventually comes to the end of the path. He does t h i s s e v e r a l times and then r e a l i z e s what he should have grasped to some extent at the beginning, that everything i s r e l a t e d and i s part of a c a r e f u l l y planned procedure. - 78 -- XVI -Conclusion We have observed that improvement could be. made i n each p a r t i c u l a r c l a s s of work by a p p l i c a t i o n of the laws of l e a r n i n g . The law of use could be ap p l i e d e f f e c t i v e l y by g i v i n g s i m i l a r classes of work u n t i l each c l a s s Is thoroughly learned. The r e a c t i o n s involved could be strengthened to a degree where the improvement i n l e a r n i n g might be made permanent. We have remarked on the f a i l u r e to observe and apply the law of -recency* Tod long a period i s allowed to elapse i n many cases before the learner i s given work again of a s i m i l a r nature. We have observed numerous s i m i l a r instances of f a i l u r e to apply the law of disus e . As a r e s u l t of the student's being t r a n s f e r r e d to an e n t i r e l y d i f f e r e n t c l a s s of work, that which he has al r e a d y learned has been f o r g o t t e n . I f a mental operation i s elaborate, the number of r e p e t i t i o n s must be greater, and the recency of the attempts must be increased, i f the operation i s to. be s u f f i c i e n t l y exercised. We have Indicated means whereby a greater number of u s e f u l associa-t i o n s could be incorporated i n t o the r e a c t i o n that i s to be exer c i s e d . I t should be as r i c h as pos s i b l e with d e s i r a b l e a s s o c i a t i o n s . A more complex pattern w i l l ' obviously require greater and more frequent e x e r c i s e . Furthermore, we have seen that through i n s u f f i c i e n t and Infrequent exercise a - 79 -l e s s e n i n g i n the promptness/sureness, and ease of r e c a l l w i l l occur; and that by f a i l u r e to observe these p r i n c i p l e s the time already spent on a subject may have been wasted. We have noted a p p l i c a t i o n s of the lav/ of e f f e c t to some extent i n observing that the best r e s u l t s were obtained as a r e s u l t of a f e a r of adverse c r i t i c i s m . ' A desire to product work of a h i g h grade i n order to enjoy favourable comment was a l s o manifest. A d e s i r e to avoid e r r o r s being d i s -covered had an important i n f l u e n c e on the t r a i n i n g . We suggested that by g i v i n g the l e a r n e r a greater understanding of what he i s doing, s t i l l greater b e n e f i t s might be achieved. We have shown that the nature of the t r a i n i n g tends toward developing the mind without r e c o g n i t i o n of I t s a c t i v e nature. In the preparation of working paper's, the tendency was to f o l l o w , step by step, without t h i n k i n g , the p a t t e r n of these papers. The work was c a r r i e d out a s u f f i c i e n t number of times u n t i l the form became memorized, •without the learner n e c e s s a r i l y understanding i t s i m p l i c a -t i o n s . We suggested that t h i s c o n d i t i o n could be improved, i f he were a s s i s t e d to l e a r n l o g i c a l l y . The o b j e c t i v e s should be described to him, and t h e i r r e l a t i o n s h i p s pointed out. He would then keep these o b j e c t i v e s before him, and a s s o c i a t e each part to them as he worked. An hypothesis that d i s t i n g u i s h e s between three d i f f e r e n t modes of l e a r n i n g - t r i a l and e r r o r , i m i t a t i o n - 80 and r e f l e c t i v e a n a l y s i s or reasoning, was found to be con-venient i n the examination of the t r a i n i n g that has been described. The term t r i a l and error l e a r n i n g has been used i n a r e s t r i c t e d sense, f o r i t can be observed that the process of l e a r n i n g by reasoning i s not e n t i r e l y d i s t i n c t from l e a r n i n g by t r i a l and e r r o r . In reasoning, as In any other form of l e a r n i n g , the s o l u t i o n of a problem i s achieved by a process of t r i a l s and e l i m i n a t i o n s of e r r o r s , and the s e l e c t i o n of the s u c c e s s f u l or s a t i s f a c t o r y means to that s o l u t i o n . Where t r i a l and e r r o r l e a r n i n g has been r e f e r r e d to i t has been used I n the sense of l a c k of those elements that are manifest i n the higher forms of reasoning. The term reasoning has been used to imply that the mind of the i n d i v i d u a l i s more active,.and that he i s able to'draw h i s information from a wider source, that h i s e f f o r t s are more h i g h l y organized, that he has a better sense of d i r e c t i o n and that he has, g e n e r a l l y , a higher understanding of what i s required and of the r e l a t i o n s h i p s Inherent i n h i s problems. .We suggested methods f o r r a i s i n g the standard of t r a i n i n g t o a plane where the reasoning processes of the mind could be allowed more play and where these processes could be r e f i n e d . The whole of the work i s b u i l t up l o g i c a l l y - . He should be aided i n t h i n k i n g out h i s work as n e a r l y as p o s s i b l e on that basis which was i n the minds 81 of "th.se who - o r i g i n a l l y prepared the form. The c r i t i c i s m was o f f e r e d that the o b j e c t i v e s of the work and the r e l a t i o n -ship of the parts should not be l e f t u n t i l the learner reaches a c o n d i t i o n where he i s conducting the work himself. V!e saw a l s o t h a t , even a f t e r he had reached t h i s stage, he s t i l l worked to a great extent by i m i t a t i o n u n t i l he event-u a l l y achieved an understanding that he should have had long before. We saw/- that the t r a i n i n g leading up to where an e n t i r e audit Is c a r r i e d out by the i n d i v i d u a l may be divided g e n e r a l l y i n t o two parts - .that where ..he i s f o l l o w -ing w r i t t e n and v e r b a l i n s t r u c t i o n s , and that where the preparation of working papers i s involved. In the f i r s t case, the e r r o r s that were made d i d not always come to l i g h t , so they were of l i t t l e use as a means of improving h i s knowledge. In the second case, the er r o r s were u s u a l l y apparent on the working papers, and could be used as a basis f o r improvement. In a l l the v e r i f i c a t i o n we observed that reason-ing l a y behind the i n s t r u c t i o n s and the forms that were followed. There was always an o b j e c t i v e and a l o g i c a l process leading up to i t . . The learner i s l e d along this c a r e f u l l y reasoned pathway by these i n s t r u c t i o n s . a n d forms. There i s an opportunity f o r the exercise of h i s own i n t e l l i g e n c e w i t h i n the l i m i t s that are thus marked out. He i s compelled to follow-, one step at a time, a reasoned p a t t e r n as he works, 10 such an extent that he eventually f i n d s he i s doing h i s own reasoning. The pattern becomes es t a b l i s h e d i n h i s mind c h i e f l y by - r e p e t i t i o n , not by l e a r n i n g i t l o g i c a l l y . An understanding of the s i g n i f i c a n c e of each c l a s s of work was obtained as an outcome of h i s attempts to describe and e x p l a i n i t to someone e l s e . The mind reached a higher degree of a c t i v i t y , reasoning became more apparent and h i s l e a r n i n g became more r a p i d . He made d i s c o v e r i e s at t h i s stage which he should have made when he was doing d e t a i l work. This increase i n r e f l e c t i v e t h i n k i n g could have been achieved i n each p a r t i c u l a r phase of h i s work i f the t r a i n i n g was c a r r i e d out i n keeping with the laws of learning' and the p r i n c i p l e s o u t l i n e d . An i n t e l l i g e n t i n d i v i d u a l w i l l f i n a l l y achieve the o b j e c t i v e s of any t r a i n i n g , however u n s c i e n t i f i c i t may be. The reasoning processes t h a t l i e beneath what i s being done w i l l e v e ntually be discovered by him and u t i l i z e d . I f he i s to be brought to a b e t t e r and quicker understand-ing of 'whatever he i s l e a r n i n g , some effor't should be made to a s s i s t him through the use of the l a r g e , s y s t e m a t i c a l l y organized boay of knowledge which educational psychology has developed. How much can be gained by a c o n s i d e r a t i o n of i n d i v i d u a l d i f f e r e n c e s has not been dea l t with i n these pages. I t i s s u f f i c i e n t to. s t a t e that the beginner i s selected to some extent on a basis of h i s past achievements, which may g e n e r a l l y be taken to i n d i c a t e t h a t he i s s u i t e d f o r the work. Moreover, h i s r e l a t i v e a b i l i t y to l e a r n soon becomes manifest. I t i s safe to assume th a t success i n t h i s p r o f e s s i o n c o r r e l a t e s h i g h l y w i t h i n t e l l i g e n c e . Some-thing might be gained by an attempt to a s c e r t a i n , on a s c i e n t i f i c b a s i s , at the outset, the degree of the i n d i v i d -u al's a d a p t a b i l i t y f o r the work; but t h i s l i e s outside the scope of t h i s d i s c u s s i o n . A h i g h l y s p e c i a l i z e d technique was observed i n the procedure that i s followed; but i t i s a technique the s i g n i f i c a n c e of which r e l a t e s to the work that i s to be c a r r i e d out and not t o the t r a i n i n g of the i n d i v i d u a l . No such c a r e f u l l y thought-out plan e x i s t s as regards the t r a i n -i n g . We have seen the l e a r n i n g of systematic methods of t h i n k i n g and working by a procedure that i s not n e c e s s a r i l y s c i e n t i f i c . .The c r i t i c i s m s that have been offered are not to be i n t e r p r e t e d to imply that the method of t r a i n i n g i s not e f f e c t i v e . I t i s s u p e r i o r , perhaps, to that used . elsewhere, where s i m i l a r classes of work are involved. An examination of the t r a i n i n g received i n other f i e l d s might i s c l o s e s t i l l greater shortcomings i n those f i e l d s . The system of t r a i n i n g that has been o u t l i n e d does s a t i s f y the a pragmatic t e s t - i t achieves r e s u l t s of a high order. An attempt has been made to show that these r e s u l t s can be obtained more economically and i n a shorter period of time. - oOo -Bibliography A n g e l l , J.R.,'Psychology, 1908, Chapters 11 and 12 Book, W.F., Learning to Typewrite, 1925, Chapters 1 and Gates, A.I., Psychology f o r Students of Education, 1927, Chapters 10 to 14 i n c l u s i v e . P y l e , W.H., The Psychology of Learning, 1921, Chapters 1 to 8 i n c l u s i v e . Thorndike,E.L., Educational Psychology, 1913, Volume 1, Chapter 12. Woodworth, R.S., Psychology, 1925, Chapters 16 ana 18. ho references are given to accounting texts as none appear to be w r i t t e n with the point of view- required i n these pages. Moreover, nothing has been w r i t t e n regarding the a c t u a l t r a i n i n g that i s described. 

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