Duties of accounting clerks during the civil war and their influence on current accounting practices.

King, Darwin L. ; Case, Carl J.

ABSTRACT

No single event in United States history has had such a profound impact on our country as the Civil War of 1861 to 1865. An analysis of military accounting documents of the period provides valuable information related to their influence on current accounting and auditing practices. These documents illustrate U.S. Army recordkeeping requirements and also reveal various internal controls utilized during this period. The goals of safeguarding assets and producing accurate accounting reports were critical to the military during these desperate times.

This paper begins with an overview of military organization. The purpose is to discuss and explain the hierarchical structure of the U.S. Army The next portion of this document continues with reviews of the positions of company accounting clerks and quartermasters. Both of these assignments required responsible, conscientious soldiers who could be depended upon to prepare numerous reports. A significant number of internal controls were employed in an effort to properly account for the two major classes of assets, men and materials. Military regulations specified in detail the accounting and auditing tasks required when a particular report or statement was prepared. A number of actual Civil War accounting reports are reviewed in this paper with copies included in the appendix. The paper concludes with a review of accounting practices and internal controls that were instituted during the Civil War and continue to influence current accounting procedures.

INTRODUCTION

Civil War history is alive and well today for many Americans who visit popular battlefields and study famous generals. However, forgotten heroes of the war certainly include the dedicated accounting clerks and quartermasters who prepared a wide variety of required statements and reports in very dangerous conditions. These soldiers attempted to maintain adequate internal controls during this very difficult period. For example, U.S. Army Regulations stress the separation of the duties of authorization, custody, and record keeping. Also, the use of multiple copies of documents in order to create an adequate "audit trail" was evident. The report forms were preprinted in an effort to minimize input errors and aid in their proper completion. Finally, Army regulations and associated texts such as The Accounting Clerk by August V. Kautz provided accounting clerks and quartermasters with sufficient and adequate documentation to ensure accurately prepared statements. This paper reviews the accounting and auditing activities of the dedicated accounting clerks and quartermasters who, in the midst of all of the strife, maintained the required documents in an effort to provide financial order. Company accounting clerks, quartermasters, assistant quartermasters and other accounting personnel were required to prepare a large number of documents on a daily, weekly, and monthly basis. Their dedication to this important task allowed the Army to effectively function with accurate and timely accounting paper of many types.

Accounting paper included invoices, monthly and quarterly reports, inventory schedules, and numerous other documents that were required by the Federal government in an effort to maintain accurate records related to physical assets and human resources (often simply termed men and materials). The appendix of this paper includes a number of examples of such documents. In particular, the reports typically prepared by a company accounting clerk will be examined.

Record keeping for both the Union and the Confederacy was an enormous task. The Union Army enlisted approximately 2.8 million men during the period from 1861 to 1865 (Bradley, 1990). The Confederacy enlisted somewhere between 600,000 and one million soldiers. Many historians believe that 750,000 is a logical estimate (Ibid). Given these numbers, the amount of record keeping that had to be done was enormous. Many factors affected the volume of military reports. For example, each unit of the Union Army was required to prepare invoices and inventory reports on a regular basis. Also, each military unit hired additional men from the local community as laborers who were normally paid monthly creating additional recordkeeping. With 3,559 different units in the Union Army and at least 1,526 units in the Confederacy, the paper, quill pens, and ink were constantly in use (Davis, 1993).

Reports were required from each operational unit within the army. The Union Army, during the Civil War, was composed of units of infantry, cavalry, heavy artillery, engineers, light infantry, and artillery batteries. Each report in the appendix is related to a specific military unit such as the 22nd Maine or the 48th New York. Reports of wounded and dead were required on a regular basis from each unit. Also, inventory summaries from each camp had to be completed on at least a monthly basis. Certain arms and supplies were inventoried weekly or even daily. This included critical assets such as horses and wagons (means of transportation) and most clothing, camp, and garrison equipage. The sheer number of reports required by the army placed a significant strain on the accounting clerks in their effort to maintain adequate internal controls and an effective audit trail.

ORGANIZATIONAL STRUCTURE OF THE U.S. ARMY

To allow the reader a better understanding of the following accounting reports, a brief introduction to basic military organization is appropriate. The U. S. Army is organized into corps, divisions, brigades, regiments, and companies (Regulations, 1861). A corps is the largest form of military unit. It is made up of two or three divisions under the direction of a Major General (Union) or a Lieutenant General (Confederate). A division is composed of two or three brigades. Each division is led by a Major General or Senior Brigade General. A brigade is a military unit consisting of two to six regiments. Either a Brigadier General or a senior Colonel commands it. A regiment is typically composed of 800 to 1,000 men. The commanding officer of the regiment is normally a Colonel. When the Civil War began, a regiment was at full strength with 1,000 men. After the first two years of the war, many of the regiments contained less than 500 members. As new men joined the army, they were normally assigned to new regiments rather than being added to depleted units. Finally, a regiment can be broken down into the smallest military unit called a company. Infantry regiments were typically composed of ten companies (Regulations, 21). However, heavy artillery regiments often had twelve companies. Each company was assigned a letter in alphabetic order (i.e. Company A, B, C). However, the letter "J" was never used in the process of assigning company alphabetical titles. The company became the basic unit of recordkeeping activities for the Army necessitating the selection of a company accounting clerk for each. Internal controls were employed at the company level in an effort to safeguard both human and physical resources. Frequent inventories of men (multiple daily roll calls), horses, wagons, arms, and all other equipment provided some assurance that the army's assets were safeguarded.

In the Union Army, a company was at full maximum strength with 98 enlisted men and three officers for an infantry company, 100 enlisted men and three officers for a cavalry unit, and 147 enlisted men and three officers for a battery of artillery (Kautz, Clerk, 1865). The minimum strength of a new company was 83 total members. Each infantry company was allowed to recruit between 64 and 82 privates. The remainder of the company was comprised of men from all of the other ranks. A company normally included one captain, one first lieutenant, one second lieutenant, one first sergeant, four sergeants, eight corporals, two musicians, and one wagoner (Ibid). Early in the war, its members elected the officers of the company. This practice was later replaced in 1862 by a system of examinations in an effort to eliminate incompetent officers who were elected to the position by friends. The company was often broken into four smaller groups that were called squads for tasks such as target practice and guard duty (Regulations, 21). However, accounting records and related internal controls related to the entire company.

The rank of each soldier was very important. Each report was normally prepared by a person of lower rank and authorized and approved by a superior. The military used the following ranking system from lowest to highest: private, corporal, sergeant, second lieutenant, first lieutenant, captain, major, lieutenant colonel, colonel, brigadier general, major general, lieutenant general, general. Quartermasters, with a rank of either first or second lieutenant, prepared many of the summary accounting reports. Quartermasters and Assistant Quartermasters were normally appointed for each regiment (i.e. 10 to 12 companies). However, accounting transactions originated at the company level. Accounting clerk reports represented the "subsidiary ledger" figures that were summarized to determine totals for the regiment. Quartermasters provided the "custody" function by safeguarding numerous types of equipment, armaments, and clothing prior to being issued to a military unit or soldier.

THE COMPANY ACCOUNTING CLERK

The U.S. Army demanded that its accounting statements and reports be accurate, timely, and relevant to decision making. This is similar to business firms today who must follow GAAP to accomplish this task. Record keeping in the U.S. Army began at the most basic level with the company clerk. The company or accounting clerk was a position filled by a man who was either a non-commissioned officer or soldier who was known to have good penmanship and a capacity for keeping good reports and records. This basically meant that privates (soldiers), corporals, or sergeants (non-commissioned officers) were allowed to hold the position of company clerk. This position is similar today to a bookkeeper's work in any small organization. The relevant tasks involve the recording, summarizing, and classifying of all financial events for the entity.

The clerk was normally supervised by either the commanding officer of the company (i.e. captain) or the first sergeant. The company accounting clerk's position was one that experienced a fairly high rate of turnover. Accounting clerks were replaced for reasons such as having very poor penmanship skills, being lazy and tardy in report preparation (timeliness), or having difficulty in locating documents and reports for review by company officers.

Company accounting clerks were "experienced penmen selected from the companies to assist the first sergeants in the making out their returns, reports, muster-rolls and other documents" (Kautz, Customs, 1865). Normally, one clerk per company was sufficient to accomplish the reporting requirements of the position. The clerk was often freed from tasks such as guard and kitchen duty due to his responsibility for the preparation of numerous daily reports and statements. However, he did not receive any additional pay for the extensive work required.

ACCOUNTING RECORDS MAINTAINED

The clerk was required to maintain current records in nine separate books. The Morning Report Book, Sick Book, Rosters, Descriptive Book, Clothing Book, Order Book, Account Book of Company Fund, Register of Articles Issued to Soldiers, and Record Book of Target Practice were all the responsibility of the company clerk (Kautz, Clerk, 1865). Indeed, this position was a seven-day, never ending job requiring excellent planning and organizational skills.

[ILLUSTRATION OMITTED]

The Morning Report Book was prepared and sent to the regimental adjutant's office after sick call but before 8 am daily. The book contained the duty status of each soldier in the company. It included a "Remarks" column that described the reason for every officer or soldier not being available for duty. This document also described the situation of any soldier on "special or extra duty." Extra duty was a situation where soldiers were assigned to some continuous labor, in addition to their normal duties, for a period of ten days or longer (Kautz, Customs, 1865). The most typical situations included employment in the Quartermaster's department as mechanics, laborers, or teamsters. Soldiers received additional pay for this extra duty work until the practice was discontinued by the Act of March 3, 1863. Special duty related to the soldier being employed on duties that were not strictly military including serving as mechanics, general laborers, cooks, attendants in hospitals, clerks, officers' servants, pioneers, scouts, or spies (Kautz, Customs, 1865). The Morning Report Book, in addition to listing the men available for duty, also listed any soldier who was under arrest, away with or without leave, killed in action, wounded, hospitalized, or sick. The Regimental Surgeon had sole responsibility of excusing soldiers from duty due to illness. The Captain and other officers commanding the company had no such authority. The company's officers did have the power to excuse men from duty when they were assigned to jobs including the company clerk, company tailor, or company blacksmith (Kautz, Clerk, 1865). The Morning Report Book required the clerk to review the status of each man in the company in an effort to determine the number of soldiers available for duty each day.

The Sick Book was updated every morning reporting the names of all ill soldiers. It included a statement by the surgeon as to whether they were excused from active duty or available for duty. "For duty" meant that the man was fit and able to perform all of the typical duties of a soldier including guard duty, drills, parades, and detached service (Kautz, Clerk, 1865). Detached service was a situation where soldiers were sent away from their companies to perform duties at another post, camp, or garrison (Kautz, Customs, 1865). The Sick Book also described situations where soldiers were only partially incapacitated and could perform some duties but were excused from others such as riding horses or guard duty.

The Roster Book was prepared using one page per month. It shows the names of each man in the company down the left of the page and each day of the month running across the top from left to right. This book recorded three classes of duty including guard, detachments, and fatigue. Normally, a separate Roster was maintained for each duty class (Kautz, Clerk, 1865). Fatigue was a term applied to all duties not strictly military which included laboring making roads, foraging for supplies and materials, and working on improving the grounds near a camp or post (Kautz, Customs, 1865).

The Descriptive Book listed each non-commissioned officer and enlisted man of the company with numerous details pertaining to each man (Kautz, Clerk, 1865). For example, the book included age, height, complexion, eye and hair color, birthplace, occupation, and when, where, and for how long they enlisted. In addition, other information including character, promotions, appointments, compliments, and medals earned was listed. Negative aspects of the soldier including punishments resulting from court-martials were also included. This book was intended to list "every important item to the credit or discredit of a soldier, to enable officers succeeding to the company to have a correct history of the men" (Ibid.).

The company Clothing Book was prepared by the clerk in an effort to maintain records of clothing issued to each non-commissioned officer and private (Kautz, Clerk, 1865). Army Regulations clearly state the amount of clothing allowance for each soldier on a yearly basis. For example, a private in the infantry received a clothing allowance of $52.03 the first year, $30.12 the second, $42.96 the third, $30.12 the fourth, and $39.62 for the fifth year of enlistment (Kautz, Clerk, 1865). This allowance represented a total of $194.85 for a private who served for five years. The Clothing Book was intended to accurately record all clothing requested by a soldier with a resulting figure for either clothing allowance still owed to the soldier or "over-issues" which resulted in a debt to the army. These "extra issues" were payable by the soldier at the payroll musters which were conducted every two months (Kautz, Clerk, 1865). The Muster Roll (payroll report) showed the deduction from the soldier's pay as a special memorandum entry.

Clerks had to show either "due the soldier for clothing not drawn" or "due the U.S. for clothing overdrawn" for each member of the company. The army was very concerned about the safeguarding of its assets, which included all the various forms of clothing issued to the men. One page of the Clothing Book was dedicated to a single soldier. The army normally provided the men with their entire first year's clothing allowance upon enlistment. In following years, the clerk used a monthly allowance to determine if an overdrawn or underdrawn situation existed. Clothing recordkeeping alone required a substantial amount of the clerk's time.

The army also attempted to safeguard clothing by carefully reviewing any soldier developing a disability soon after enlistment. If the problem was legitimate, the soldier was allowed to leave the army and keep the clothing with no deduction from their final paycheck (Kautz, Company, 1865). However, if the man was found to be of "unworthy character" and attempting to defraud the army, the full clothing allowance was withheld from his final paycheck. Therefore, an early "code of ethics" was utilized by the military in an effort to reduce fraudulent asset losses. Ethical behavior was as important during the Civil Was as it is today.

Another problem facing the company clerk related to soldiers who were "careless and improvident" and sold their clothing to raise extra money. This occurred in areas of the country where clothing was much in demand (Kautz, Clerk, 1865). At times, clerks requested soldiers to produce their clothing for inspection or account for its absence prior to the issuance of additional items. The Act of January 11, 1812 prohibited the purchase of military clothing by any person not serving in active duty. The punishment included a penalty of three hundred dollars and one year's imprisonment (Ibid.). This, however, did not eliminate the black market in military clothing. Penalties for the soldier, under the 38th Article of War, also applied if they were found guilty of selling clothing or not properly caring for every asset entrusted to them.

The Order Book maintained by the clerk included all general orders from the regimental headquarters (Ibid). This document also included any special orders that pertained to the company in general or to a particular member of the unit. For example, any soldier taken from the company for special duty elsewhere would appear in the Order Book. This book was organized either chronologically based on the date of the orders or by the type of order.

The Company Fund Account Book was a cash fund utilized by the unit for the purchase of necessities that were not furnished by the army (Kautz, Clerk, 1865). It basically took the form of a sources and uses of cash statement. On the left side, the sources of company funds were recorded. This "debit side" normally began with the fund's beginning balance and listed the sources of cash including amounts received from either the regiment or company savings account. The company fund also increased with the sale of unused company rations, allocations of post or regimental funds, and the sale of surplus vegetables raised in a company garden when stationed in a single location. The right or "credit side" of the Company Fund listed all the uses of cash such as the purchase of spices for cooking.

The Return of Company Fund was prepared every four months and reconciled the amount of cash that should have existed at the end of each accounting period. It was prepared by the company clerk and signed and approved by the commanding officer. This was typical for army internal control requirements as reports were prepared by a clerk (recordkeeping) and approved (authorization) by a commanding officer. The report was completed in duplicate so that one copy remained with the company and the other was sent to regimental commanders. At the regimental level, all reports of the companies were summarized and reviewed for accuracy.

The Register of Public Property Issued to Soldiers was another book prepared by the accounting clerk (Kautz, Clerk, 1865). Its purpose was to record all of the rifles, pistols, swords, and other arms issued to each man. These assets were carefully assigned to each soldier in an effort to safeguard critical resources. The book also contained information on the issuance of cap-boxes, cartridge-boxes, gun slings, waist belts, and small tools used to maintain the weapons. Soldiers were normally charged for lost arms unless there was a very legitimate reason. Also, any stolen weapon was charged to the soldier unless he could show that he took adequate steps to safeguard it. Following a military engagement, the officers of the company were required to inventory arms in the hands of surviving soldiers and collect weapons from soldiers who were either killed or wounded (Kautz, Clerk, 1865).

The final book maintained by the company accounting clerk is the Record Book of Target Practice. This book, furnished by the Regimental Quartermaster, was used for recording the rifle shooting abilities of each man in the company (Kautz, Clerk, 1865). Each man fired four rounds at distances from 150 to 400 yards. Soldiers with the best accuracy received a company prize, which was a brass medal indicating sharpshooter abilities. This book had to be forwarded to the commanding officer of the regiment weekly.

These nine books required a tremendous amount of the clerk's time. However, this was not the full extent of the tasks required of him. In addition, the preparation of a large number of reports, returns, rolls, and papers was mandatory. The clerk also had to comply with the requirement for multiple copies of each report in order to complete an "audit trail" to Washington. Internal control was an important concern even though the duplicate copies of reports and statements had to be manually prepared lacking the luxury of carbon paper.

ADDITIONAL REPORTS PREPARED BY THE ACCOUNTING CLERK

The company accounting clerk was also responsible for the preparation of the following documents in addition to the books discussed above.

This list provides insight into the extent of work required from each accounting clerk. Every day a significant number of reports were required with especially heavy workloads occurring at the end of each calendar month and quarter. Muster Rolls were normally prepared every two months in an effort to pay the soldiers on a regular basis. In actual practice, however, the men were often not paid for a period of three to six months. Many of the muster rolls reviewed by the authors showed payment for services of three or more months. This often resulted from the unit's involvement in active engagements that limited the ability of paymasters to complete their duties.

The accounting clerk even had to complete records related to the company laundresses. Four women were allowed to serve each company as washerwomen (Regulations, 24). The Army's Council of Administration prescribed the price for washing all items of soldier's clothing. The clerk maintained a record of debts owed to each laundress as they completed their weekly washing duties. The washerwomen were compensated at the pay-table on a bi-monthly basis when a muster roll was conducted. Therefore, accounts receivable records were constantly updated over the two-month period to ensure that these women received adequate compensation.

Required Reports, Returns, Rolls, And Papers:

1. Daily- List of Sick (Sick Book)
 Morning Report (Morning Report Book)
 Details of Men (For Guards, Detachments, et.)

2. Monthly- Monthly Return (Summary of Men and Equipment)

3. Bi-Monthly- (Due end of Feb, April, June, Aug, Oct, Dec)
 Muster Rolls (Payroll reports)

4. Quarterly- (Due end of March, June, Sept, Dec)
 Return of Clothing, Camp And Garrison Equipage
 Return of Ordnance And Ordnance Stores
 (Including All Weapons, Ammunition,
 Supplies, et.)
 Return of Quartermaster's Property
 Return of Deceased Soldiers
 Descriptive List of Men Joined
 Return of Blanks

5. Annually- Annual Return of Casualties

Finally, the clerk was responsible for the preparation of the following papers related to numerous unique situations. They were prepared on an "as needed" basis as the event occurred. Special papers included:

1. Certificates of Disability
2. Discharges
3. Final Statements (Final payroll)
4. Furloughs, Passes, Sick Furloughs, etc.
5. Inventories of Deceased Soldiers
6. Requisitions for Forage, Fuel, Stationery, Straw, and for every
 kind of property such as Arms, Ammunition, Clothing, Camp and
 Garrison Equipage, Quartermaster's property, and nearly everything
 needed by a Company.
7. Inventory of Damaged Property
8. Returns of Killed, Wounded, and Missing in Action
9. Reports of Target Practice

All of the books and reports maintained by the U.S. Army relate to the objectives of gathering financial data in two key resource areas, men and property (materials) (Kautz, Clerk, 1865). Human resources and physical assets required a proper accounting on a regular basis. The reports related to men were meant to keep a record of "their account and their service." A soldier's account pertained to the amount of money owed to him by the Army or any balance he owed to the government. Regulations continually emphasized the importance of maintaining the full set of required financial reports, statements, and records. According to army regulations, the military wanted the accounts to be "correct and perfect as a matter of justice to the men and to the government" (Ibid.). A similar philosophy related to the reports that pertained to all types of tangible property. The internal control objectives of maintaining accurate accounting information and safeguarding all assets were critical to the U.S. Army.

During the Civil War, the Federal Government was also very interested in maintaining an audit trail. There were a number of Circulars from Washington that emphasized the use of three copies of each report. Two copies were used at the company and regimental levels. The third copy of each report, prepared and authorized by the ranking officer(s) of the unit, was supposed to be sent to Washington. Based on the author's research, Washington had difficulty accomplishing this goal. It reminded each military unit numerous times during the war that this three-copy policy must be followed in order to maintain an efficient audit trail.

BASIC RECORDKEEPING PRINCIPLES REQUIRED BY THE U.S. ARMY

U.S. Army Regulations directed clerks to follow five basic recordkeeping principles (Kautz, Clerk, 1865). First, they were required to complete invoices for all property they received from other military units. Second, clerks were required to take receipts for all military property transferred to other companies or regiments. The third principle required them to get certificates for property lost or destroyed. These certificates were to be acquired from officers, if possible, or from soldiers or the clerk himself as a last resort. This was a common situation following an engagement as many items of equipment and arms were either lost or destroyed. The fourth recordkeeping principle required the clerks to make every attempt to not mix property of different departments. This included Ordinance, Quartermaster's property, and Clothing, Camp and Garrison Equipage, as each of these departments required its own style of report. The fifth and final general principle required them to not allow unserviceable property to accumulate. The clerk was to present the items to a company or regimental inspection officer who would order their disposal. These principles were utilized in an effort to safeguard all strategic assets (men and materials).

A REVIEW OF AUTHENTIC CIVIL WAR REPORTS

This paper continues with a review of several accounting documents. Some of them appeared in the U.S. Army Regulations of 1863. The Regulations provided examples of the proper format for completed reports as an aid to clerks, quartermasters, and officers involved in their preparation and authorization. This is similar today to firms that produce an accounting manual in an effort to train employees related to proper accounting practices and procedures. Other statements found in the appendix represent actual Union Army documents collected by the authors during the last ten years.

Report 1-The Sick Book

The first report in the appendix is the company sick book. This is a human resource document that was required to be updated every morning by each company. Notice that this form (Report 1) was a very simple yet important report. Human resources were a critical asset for the Army and this book was used as an "audit trail" to review cases where soldiers were chronically ill and missed a significant amount of active duty time.

The document was completed in order to determine which soldiers in the company were "fit for duty." This book contained the names of every member of the company that was not fully available for active duty that day. The process began each morning when a non-commissioned officer marched any "sick" men to visit the surgeon. The surgeon then determined who was fit for duty and recorded his decisions in the book, which was then returned to the first sergeant who, with the aid of the company clerk, completed a morning report showing the strength of the company. Someone who was "fit for duty" was expected to perform any legitimate task expected of a soldier. The surgeon was required to be very specific related to limited service expected from a member of the company. Notice on the example form that some men were excused from riding or guard duty but were well enough to perform other normal activities.

Report 2-Statement of Cost of Clothing, Camp, and Garrison Equipage

Report 2 in the appendix is the reference guide (General Orders, War Department, 1865) used in the determination of whether a soldier was over or under spent in his annual clothing allowance. Records were kept in the Company Clothing Book to determine if issues of clothing to non-commissioned officers (sergeants and corporals) and privates were more or less than their annual allowance. The form in the appendix was used by the company accounting clerk to determine the cost of each item of clothing. For example, hats cost about $1.65, coats were $5.30-$7.30, and trousers cost $2.50-$3.75. When a soldier was issued clothing, his account was charged for the cost listed in this table reducing his available clothing allowance for the year. A detailed standard cost system was utilized by the army for any item of clothing.

The regular (drafted) military received an annual clothing allowance as shown on the second page of Report 2. For example, a corporal in the cavalry received a clothing allowance of $55.38 in his first year of service. This dropped to only $31.07 in the second year. The total clothing allowance for a five-year enlistment in the army was approximately $200.00. In the year of enlistment, the soldiers were provided with their full clothing allowance while in later years the apparel was requested by the men on an "as needed" basis.

Volunteers accounted for approximately 80% of the total membership of the army. The troops who were volunteers (vs. drafted military) received a monthly clothing allowance. This figure was fixed by law at $3.50 per month or $42.00 per year (Kautz, Quartermaster's, 1865). Each soldier's account was calculated by comparing the clothing drawn to date with the appropriate clothing allowance based on time served. When the soldier left military service, his personal account showed either "due the U.S. for clothing overdrawn" or "due the soldier for clothing not drawn." In the final statement, the calculation of the net amount due the soldier was determined. Therefore, the final military payroll received by a soldier was adjusted either up or down based upon an over or under spent clothing allowance. The final payment also normally included some travel expense money to aid the soldier in returning home.

Report 3-The Company Fund Book

Report 3 in the appendix is an example of the Company Fund Book. This form is basically a cash receipts and disbursements journal. Its basic sections are sources of cash, disbursements of cash, and balance carried to the next statement. In this example form, $480 of cash was received, $156 was expended, and the ending cash balance of $324 was carried forward to the next statement period.

This cash account was for the "benefit of the enlisted men only". Every two months or less, if necessary, the company commander (i.e. Captain) gathered with other officers and determined the expenses that would be paid from this fund. The fund was supposed to be used for the payment of "necessaries that are not furnished by the army" (Kautz, Clerk, 1865, 25). This could include a great many things such as condiments for cooking, vegetables for the messes, tools for the mechanics, stencil plates for marking names in clothing, books for a company library, and other items necessary for the "comfort, health, and convenience of the enlisted men of the company" (Ibid). This could also include expenditures for items such as furniture, small games and cards, and even some tobacco products.

Cash was transferred to the fund from a number of sources. For example, the fund was often reimbursed with cash from sales of crops raised by the company when stationed in a single location for several months. Cash was also received from both company and regiment saving accounts that were usually either deposited in a nearby bank or kept in an iron safe.

This statement was prepared whenever a new officer assumed command. Cash shortages often became evident at this time. However, military transfers were often quick and covered long distances. This meant that both the missing cash and the person responsible were never located or identified. The army required that most company and regimental assets be inventoried with a change in command. The idea was to quickly identify any missing assets as well as the person responsible for the loss.

Report 4-Tabular List of Rolls, Returns, and Reports (Partial List)

Report 4 in the appendix is a partial list of the reports prepared by the Company Accounting Clerk. Found in the U.S. Army Regulations, this document shows the clerk what statements to prepare on which date. Since the position of the clerk was often short term, a good set of documentation was required in order to aid in the process of understanding the full set of required reports and statements. Adequate documentation continues to be an important internal control today in an effort to produce accurately prepared financial reports. Notice that certain situations required the immediate preparation of a report. This was true in the case of the death of a soldier. The company commander expected the clerk to provide Final Statements of Deceased Soldiers as soon as possible. This involved an inventory of the dead soldier's belongings so the items could be put into a safe place for later delivery to family members. Timeliness was critical due to the fact that cash and other valuables quickly disappeared.

This page in the regulations summarized the "Generally Accepted Military Document Practices" for the accounting clerk. Army regulations presented the expected format of a typical report as well as details of where and when the report was to be distributed. The army imposed input, processing, and output controls on every report preparer. From a review of this report, it is apparent that the clerks were especially busy at the end of each month and each quarter. Finally, the number of required daily reports was significant with some due prior to 8 am. It appears that "paperwork overload" existed at this early date in our history given the army's desire to operate an efficient and effective accounting system.

Report 5-Circular-Quartermaster General's Office

Circulars were issued from U.S. Army headquarters in Washington and sent to all field officers. These documents pertained to a wide variety of subjects. However, this circular (Report 5) was strictly accounting oriented. It related to the transfer and requisitioning of clothing, camp, and garrison equipage. The original date of General Orders, No. 357, was on November 5, 1863. Notice that the order required invoices to be prepared in triplicate rather than duplicate. The date of the reminder Circular was January 20, 1865. Evidently many units of the U.S. Army were not preparing invoices in triplicate as required by the original Washington order. This notice was used to call attention to a document issued fourteen months earlier.

The circular also brought attention to the fact that each unit should be identified on the invoice by regiment, brigade, division, corps, and name of state. Since so many different military units existed in the army, the audit trail for invoices and reports was extremely complex. The Quartermaster General's Office was attempting to improve this audit trail in an effort to safeguard all assets. The circular states that all this information was needed "to establish the identity of the Officers receiving the supplies, and to perfect the record of the transfers".

Report 6-Requisition of Hay for Soldier's Bedding

This final report (Appendix Report 6) brings to the reader's attention the crude conditions that the soldiers endured during this difficult period in our history. This document represents a requisition for straw to be used as bedding in the U.S. General Hospital located at Hilton Head, South Carolina on March 7, 1862. The report shows that each soldier was allowed twelve pounds of straw or hay per month to be used as bedding. Soldiers in the lower ranks had no cots or other types of beds. The document states that the bedding was needed for, "non-commissioned officers, musicians, and privates." In most cases, the officers had some type of cot or folding bed that was used in their sleeping quarters. This requisition includes 12 pounds of hay for each of the 45 soldiers involved for a grand total of 540 pounds of hay. Since straw was not available, the men were forced to sleep on hay that would have been very uncomfortable.

J.E. Sample who was an assistant surgeon for the Union Army prepared the report. The bottom of the report shows not only Sample's signature but also that of Col. Fellows and George E. Cooper, a surgeon, who approved the requisition. The last statement on the document shows that Capt. H.A. Hascall who was quartermaster at that time provided the 540 pounds of hay. The certification in the lower middle of the document states that, "straw (or hay) has not been drawn for any part the time charged." This was to ensure that double rations were not requested. Each military report contained language where the preparer certifies that the information on the report was true and accurate. This form represents another good example of the Army's attempt to separate the activities of authorization, custody, and record keeping in an effort to maintain a respectable level of internal control.

INFLUENCES ON CURRENT ACCOUNTING AND INTERNAL CONTROL PRACTICES

A review of historic accounting documents provides insight into the development of current accounting practices and internal control procedures. The reports and associated internal controls utilized during the Civil War provided a framework that American businesses later replicated. Many of the officers from both Union and Confederate armies entered the business world following the war. They logically employed the accounting and internal control systems that were familiar to them. Most of these men were graduates of West Point who were perhaps the best-trained minds related to these subjects at this time. According to Hoskin and Macve (1988), a new form of "managerialism" emerged with these men. In particular, attention to financial details and a serious attempt to safeguard assets resulted from the emergence of these officers as top managers of major U.S. businesses.

The military employed many forms of internal controls during the Civil War that continue to be valuable today. In modern internal control systems, there are five primary procedures or activities that must be accomplished (Albrrecht, 2003). These include segregation of duties, proper authorization policy, independent checks, physical safeguards, and adequate documents and records. Military regulations reflect the existence of each of these practices. For example, three different soldiers normally conducted the three incompatible duties of custody, authorization, and recordkeeping. The accounting clerk prepared the reports, an officer of the company or regiment signed the documents for authorization purposes, and quartermasters normally were given custody of the assets ranging from ammunition to all forms of clothing.

In addition to a system that segregated incompatible duties, the military accounting structure required that a higher-ranking officer authorize all transactions and reports. This situation exists today when business firms require proper authorization of all events by a superior. The use of independent checks also existed during the Civil War when officers conducted surprise audits of various assets and also prepared various reconciliations in an effort to safeguard all assets. The majority of business firms utilize this policy today when surprise cash counts or regular reconciliations of receivables and other assets are completed. Physical safeguards were also employed during the Civil War. The U.S. Army required most tangible assets to be under the control of a quartermaster who managed a locked inventory storeroom. The quartermasters provided limited access to items ranging from munitions to clothing in an effort to minimize losses. This policy is used by modern businesses as they use various security measures to limit the loss of inventory.

The final control procedure relates to adequate documents and records. U.S. Army military regulations contained hundreds of pages pertaining to the proper preparation of various statements. Required reports related to supplies, clothing, camp and garrison equipage, horses, fuel, forage, straw, bedding material, stationery, and numerous statements related to the activities and compensation of the men. Current accounting and internal control systems also consider this to be critical. Modern auditing texts emphasize the importance of a firm that produces well-designed, easily understood reports and statements.

Modern accounting texts also emphasize that a good accounting system ensures that all financial transactions are valid, properly authorized, complete, properly classified, recorded in the proper period, properly valued, and summarized correctly (Albrrecht, 2003). These characteristics also existed in the U.S. Army Regulations of 1863. They reflected the education provided to the officers at West Point and set a quality standard at the early date in our history. As mentioned earlier, these officers used this knowledge as they entered the business world following the conclusion of the war. Each of these army documents was designed to accomplish the objectives mentioned above. Each report was prepared with the goals of safeguarding assets and ensuring accurate accounting records in mind. This philosophy has continued today as firms strive to accomplish this difficult objective.

CONCLUSION

This paper has attempted to provide the reader with some appreciation of the accounting and auditing tasks required of company accounting clerks in the Union Army during the Civil War. Internal controls and the maintenance of an audit trail were very important to the army as it attempted to safeguard all forms of assets ranging from numerous types of weapons and equipment to all items of personal clothing. Regular inventories of physical assets with an explanation of shortages and losses enhanced the internal control system.

Many of the army's controls are evident following a review of the documents contained in the appendix. The separation of recordkeeping, authorization, and custodial duties is obvious, since officers were required to approve all reports prepared by the clerks. Frequent, detailed reports of men and materials were necessary in order to maintain current inventory information. Multiple copies of the company's documents were required to update regimental and Washington headquarters records as well as maintain an accurate audit trail. This certainly continues to be an important objective today as firms attempt to be able to trace all transactions from the source documents to the related report or statement.

U.S. Army Regulations served to provide adequate documentation to clerks and quartermasters in their effort to maintain accurate financial records. Sufficient documentation is a key control feature for any accounting system, since it assists in clerical training and the reduction of input errors. Current goals of internal control continue to include the safeguarding of assets and the preparation of accurate accounting documents. The Union Army attempted to accomplish these objectives at a time when no technology existed. Clerks, armed with only quill pen and ink, attempted to establish a reasonable internal control system.

Accounting is considered my many to be an art. This art developed during the Civil War as officers who were West Point trained utilized their knowledge of accounting principles and related internal controls. Following the war as U.S. businesses rapidly expanded, managers realized the importance of creating an effective and efficient accounting system. This continues to be a major goal of business organizations today. Without effective accounting practices and related internal controls, the firm will have little success accomplishing their goals of safeguarding assets and ensuring accurate and effective accounting reports.

APPENDICES

APPENDIX--REPORT 1

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APPENDIX--REPORT 2

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APPENDIX--REPORT 3

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APPENDIX--REPORT 4

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REFERENCES

Albrecht, W. S. (2003). Fraud Examination. Mason, OH: South-Western Publishing.

Bradley, W. J. (1990). The Civil War. New York, NY: Military Press.

Case, T. S., A.Q.M. (1865). The Quartermaster's Guide: Army Regulations, St. Louis, MO: P.M. Pinkard Co.

Davis, W. C. (1993). Trivia of the Civil War. New York, NY: Mallard Press.

Hoskin, K. & R. Macve (1988). The Genesis of Accountability: The West Point Connections, Accounting, Organizations, and Society, 13(2).

Kautz, A. V. (1865). The Company Clerk. Philadelphia, PA: J.B. Lippincott & Co.

Kautz, A. V. (1865). Customs of Service for Non-Commissioned Officers and Soldiers. Philadelphia, PA.: Lippincott & Co.

Katcher, P. (1986). American Civil War Armies: Staff, Specialist and Maritime Services. London, England: Osprey Publishing Ltd.

War Department, (1861). Revised Regulations for the Army of the United States. Philadelphia: JGL Brown, Printer.

Darwin L. King, St. Bonaventure University

Carl J. Case, St. Bonaventure University