The Audit

When I first worked for the accountants after leaving school, one of the main tasks for me and the other trainee, Jimmy Patel, was to go out and do audits. This was generally very routine stuff: checking bank statements against chequebooks, going through petty cash slips, that sort of thing.

We had just come back from a miserable two weeks auditing the books of a meat pie and sausage manufacturer in the Midlands. We had to stay at one of the local pubs, which was awful, and didn’t manage to get back home for the weekend, as we were expected to work on Saturday until lunchtime. Mr Meadows, the qualified assistant, who was supervising us, was cross because he missed his Saturday game of cricket. He was a precise and sardonic young man who lived with his mother.

“At least this one is not far away,” the Senior Partner announced.

Before sending the three of us out on audit he always summoned us to his room for “a briefing”, as he called it. He lined us up against the wall facing his desk and paced up and down in front of us like a commanding officer giving orders to his troops.

“It’s for Williams Williams & Hedges, the solicitors just down the road. They are a very old established firm but I think they’ve seen more prosperous days. There are still two Mr Hedges as partners: Mr Maurice Hedges, an elderly gentleman who lives above the offices, and who has approached us to help out, and Mr Nigel Hedges, his much younger cousin, who apparently spends some of his time in London where he has clients in the theatrical world. Their accounts were previously looked after by a semi-retired chap who came into the office two or three times a week and wrote up the books manually. But he retired completely a few months ago and Mr Nigel Hedges decided to try to computerise the accounts. He called in a specialist firm who promised to help. They suggested as a temporary measure that they should take all the information away at the end of each week and put it on their computer and then send back the stuff and printed-out computer accounts on a Monday. Well, it proved a disaster! The computer cards kept failing to arrive on a Monday and the Hedges found themselves without chequebooks or paying-in books, etc, often until a Wednesday. In desperation, a second set of chequebooks and paying-in books were ordered from the Bank. You can imagine the chaos.”

At this stage I must explain that for reasons that will become clear, even though this happened a long time ago, I have changed the names of the solicitors involved. I must also explain that solicitors are all required to keep money they hold on behalf of clients entirely separate from their own money; they have to have two bank accounts, one called the Client Account and the other the Office Account, with separate chequebooks. No transfer of money from the Client Account to the Office Account can be made without the client first having been sent a bill.

So Jimmy Patel, a rotund and bespectacled smiling Indian, and I, led by the
sardonic Mr Meadows, duly arrived at our destination fifteen minutes later. It was a very elegant if somewhat dilapidated Georgian house. The brass plate beside the front door announcing “Williams Williams & Hedges Solicitors” was being polished by a pretty, fair-haired girl wearing a green nylon overall.

“You must be the accountants,” she said. “I am Valerie. Come in. Mr Hedges will be down to see you soon. He said to put you in the general office. There’s a big table for you to work at in there.”

And she led us to a large room at the end of the hallway. It overlooked the garden. The three of us sat down at the table and waited. Valerie, meanwhile, went to her small desk next to a row of filing cabinets and, having taken off her green overall, was silent while she punched various letters and put them on files which she took out and put back into the row of filing cabinets, the drawers of which screeched abominably as she opened and shut them. Mr Meadows kept raising his eyebrows and sighing. Jimmy, I noticed, kept glancing at Valerie, who was revealed to have a very nice figure once her green overall had been removed.

Eventually, a tall elderly man with a pronounced stoop and dressed in a three-piece black suit entered.

“I am Maurice Hedges,” he announced. “Glad you’re here. You’d better come through into my office and get all the stuff. It’s all ready for you.”

Mr Hedges’s office was a room of beautiful proportions but, in keeping with what was general for solicitors at that period, was very untidy with files and papers strewn everywhere. He indicated various ledgers, chequebooks and paying-in books and another small loose-leaf ledger marked “Bills Book” on the floor in one corner of his room. “And this,” he said, kicking a metal holder containing cardboard slips, “is our attempt at computerised accounting. I’m sorry to land you with such a muddle and I do hope that you can sort it all out for us.”

We duly carried all the stuff through to the general office and spread it out on the table.

“You’d better concentrate on the Client Account side of things, Brian,” said Mr Meadows to me. “I’ll look through everything else. Jimmy can, as usual, make a start on the cash. Where are the petty cash vouchers?”

“I’ve got them,” piped up Valerie, who was obviously listening. “But I’m afraid they got mixed up when we had to send some of them to the computer people and then I dropped the lot. They’re in plastic bags in the basement. I’ll go and get them.”

“I’ll come and help you,” said Jimmy.

“Oh dear, another one he’s taken a fancy to!” said Mr Meadows.

It was a joke that on every audit Jimmy was asked to check the cash payments and there always seemed to be hundreds of petty cash vouchers for him to look through, which because of his Indian accent he pronounced “wowchers”. And it was also a joke that he pursued the nearest attractive female in every office we went to. The girls concerned seemed rather to like him.

“It’s because he’s got the ‘wow factor’,” said Mr Meadows.

Jimmy and Valerie soon returned with four plastic bags almost bursting with “wowchers”.

“Oh my God, Walerie, the first thing we must do is to put them in date order. I shall not be able to work properly without that.”

“Well, I’ll help you as and when I have time, but we need to spread them out somewhere. I know, there’s a big table in the basement. It will be ideal. But first I’ll make us all some coffee, shall I?”

“Yes, black and strong for me,” said Mr Meadows. “I’ve just started looking through the books. What a mess!”

And so the first day passed.

Mr Meadows kept muttering, “This is the biggest bugger’s muddle I’ve ever seen.”

From time to time I looked out of the window into the sunlit garden. There were roses in the flower beds. The roses needed dead-heading and the flower beds needed weeding. The lawn in the middle of the garden was unkempt and needed mowing and rolling. In one corner there was a mulberry tree full of mulberries which I guessed would never be picked and I wondered if I really wanted to spend the rest of my life in offices while the sun shone outside and nature rotated the seasons while I checked figures and grew older. Maybe I ought to give up trying to be an accountant and become a gardener?

I spent the second day wondering why there were so many balances of clients’ money on various Client Accounts. Some seemed to have remained there for years. This was something I must discuss with Mr Meadows when he returned. He’d left me to it and gone back to our office saying, “I don’t think we shall ever be able to sort this lot out.”

Jimmy and Valerie were in the basement.

Left on my own, I was just starting to make a list of the client balances to be discussed with Mr Meadows when an authoritative figure walked into the room from the hallway. He was tall and youngish and smartly dressed in a heavily checked grey suit. He was smoking a cigar and had a red carnation in his buttonhole.

“Hello, young man. I’m Nigel Hedges,” he said. “I understand you are looking into any Client Account problems, is that correct?”

“Trying to,” I said.

He pulled up a chair beside mine and said very confidentially, “You’ve probably found small balances on accounts of various clients. The old boy who looked after our accounts rather let things slip, and instead of pointing out that we should send the money to the client or send a bill, he just ignored the whole thing. My responsibility really, as I am in charge of the accounts rather than my cousin. But not to worry, I’ll sort the whole thing out this evening with my secretary. It won’t do, I know, leaving things as they are with your firm investigating the books.”

“Oh well,” I thought. “That solves one of my problems.” And went home and slept soundly. There would be no need to say anything to Mr Meadows.

The next morning, a very attractive and heavily made-up lady came into the general office.

“Ah, you must be the young man I want to talk to. Could you come into Mr Nigel’s office please. I’m his secretary.”

And I remember thinking, “And probably not only that!”

“Mr Nigel and I worked until late yesterday evening and these are the copy bills that Mr Nigel asked me to give you,” she said, handing me a large pile of flimsy carbon copies which were used in those days of typewriters. “Mr Nigel said you would know what to do about making the necessary entries and transferring the monies to the Office Account.”

“Well,” I said, “I’m glad that’s been dealt with. You must have an awful lot of bills to put in the post!”

“Oh no. Mr Nigel said he would deal with all that. He took all the bills away with him. He’s gone up to London this morning. He has a small office there.”

What I believe are known as “warning bells” started ringing in my head. When I got back to the big table and sat down I flicked through some of the copy bills. The wording on them was laconic. “To legal services rendered”—for a balance of £150. For a balance of £10, “for disbursements made on your behalf”. What would the recipients make of these bills when they received them? And then it dawned on me that they would never get them. Mr Nigel was probably shredding them at that moment.

I had of course to report my suspicions to Mr Meadows, who whistled, raised his eyebrows and said, “Well, I’m buggered!”

We were rapidly withdrawn from the job once Mr Meadows had reported to the senior partner. The official reason set out in a formal letter to Messrs Williams Williams & Hedges was that we had looked into the situation and the confusion in the accounting system was so great that it would take many, many, man hours to sort it out so as to be able to gain a certificate to sign off the accounts. Our firm simply did not have sufficient man power to be able to do that.

Jimmy, who knew nothing about the so-called bills, was incensed when he was told we would not be going back to the Hedges office.

“You can always ring her up and make a date,” I said to keep him quiet.

I never knew exactly what happened to the Hedges. I walked past the office a few weeks later and noticed that the brass plate had been taken down; a few months after that, the house was up for sale by auction.

Although I was shocked at the time I have often thought since that Mr Nigel Hedges acted very sensibly. He had obviously discovered that there were all these Client Account balances when he glanced through the books after his cousin had told him that we had been called in to sort out the accounts. He had, understandably, trusted the accountant who had worked for them to keep the books correctly. So he was in a dilemma. If things were left as they were my firm would have to insist that the money was refunded to the clients with interest or, if work had been done, it would have to be billed. The file of every client involved would have to be examined—if indeed the files could be found. Many of the clients would probably have moved address or even died. So Nigel imagined the chaos and cost and even scandal it might cause if the newspapers got hold of the story. So he did what he did.