20 BULLETIlSr 178, U. S. DEPAETMEXT OF AGEICULTUEE. 



ongh audit of the year's business before the annual meeting. Should 

 the expense of a public accountant be prohibitive owing to the small 

 amount of business transacted, a person who is thoroughly com- 

 petent to carry on an audit should be employed, preferably some 

 l)usiness man of high standing in the community who is not in- 

 terested financially or otherwise in the organization. 



AUDITING CIRCLES. 



In the grain and dairying sections there are great numbers of 

 cooperative elevators and cooperative creameries within a radius 

 of a iew miles. If each of these organizations were to employ an 

 expert accountant to audit the books the cost would probably be 

 excessive. Small associations or circles could be formed, however, 

 by the cooperative organizations vrithin a certain radius, who could 

 enter into a contract with a competent auditor to do the auditing 

 for all of the organizations. Such an arrangement would bring the 

 services of an expert auditor to the organizations at a comparatively 

 small cost. 



CONCLUSION. 



It is not unusual to read in a report concerning the failure or sus- 

 pension of a business concern, that not until experts have been at 

 work upon the accounting records for several days or weeks can the 

 exact condition of the assets and liabilities be ascertained, or the 

 amount of loss be discovered. The frequency with which this state- 

 ment is made naturally suggests a connection between accounting 

 and success. This connection will be found, on examination, to be 

 existent in a large proportion of all business failures. 



The accounting problems connected with the cooperative organiza- 

 tions in the United States generally do not receive the attention they 

 deserve. The accounting system of an}^ organization has a far- 

 reaching effect upon the success or failure of the enterprise and upon 

 the rights of the members interested therein. It is therefore neces- 

 sary for the greatest success that the accounting system of any busi- 

 ness enterprise be based upon tlie proper fundamental principles and 

 conducted with the maximum degree of efficiency. 



SUMMARY. 



1. For the successful conduct of a cooperative business enterprise 

 a complete business system is essential. Accounting records form a 

 most important part of any business system. 



2. A business system may be defined as a prearranged plan of 

 operation governed bj^ the general laws of business practice. 



