In August 1941, I answered three classified ads in The New York Times for entry-level accountants. The previous decade, mired by the Great Depression of the 1930s, was not favorable to accounting graduates, and the quoted salaries would be considered insulting today. However, in 1941 the situation had changed.Germany had by then invaded France, Holland, Belgium, Denmark and the Baltic countries, and had installed puppet dictators in Hungary and Romania. The remaining democracy in Europe was England, which was being bombed daily by the German air force, while the heroic Royal Air Force held them at bay. London and even Coventry were severely bombed, and the population took to air raid shelters each evening, including King George VI and his wife, Queen Elizabeth.
President Franklin D. Roosevelt recognized that if England fell, Germany would look to the West. Roosevelt commenced the Lend-Lease Program, which included Liberty ships and planes to maintain England's spirit and resistance. As a result of the spurt in U.S. factory output, the entire economy pushed upward.
In response to my letters, I received three answers suggesting personal interviews. All three were from well-known firms: S.D. Leidesdorf, Klein Hinds & Finke, and Eisner & Lubin. For no particular reason, I first phoned Klein Hinds & Finke and arranged an interview. I was 20 at the time, and understood the need for a respectful demeanor, as I had spent my first post-graduate year with a large Wall Street firm.
At the time, Klein Hinds & Finke was situated on the 35th floor of the handsome Lincoln Building, which still stands on 42nd Street between Park and Madison Avenues. I was ushered into the office of Mr. Field, the review partner, for my initial interview.
He was English and balding and sat behind a large table with piles of audit workpapers. After I was seated, he said, "So you want to be a CPA?"
"Yes sir," I replied.
To my surprise, he seemed to bounce out of his chair toward me and, in a somewhat Limey accent, he shouted, "How would you audit an apple orchard?"
I was flustered, since my courses in auditing didn't cover apple orchards. So with some trepidation I replied, "It would depend on whether they were McIntosh or Delicious apples."
To my surprise, he smiled and said, "Very good, very good." I was perspiring when he bounced out of his chair again, with his face inches from mine, and exploded with, "How would you audit a coal tipple?"
I had no idea whether a coal tipple was a drunken coal miner or a piece of equipment, so I replied, "I would engage an engineering firm for an appraisal."
Once again, he smiled and I heard, "Very good, very good."
I was soon ushered into a large corner room where I faced Mr. Finke, a handsome, pipe-smoking individual. "Mr. Field suggests that you might join our staff. We will start you at a weekly salary of $20 and you can report to work next Monday." I did not answer immediately and Finke said, "Do you have any more interviews?"
I was honest and replied, "Yes sir, I do."
As a master of dealing with young applicants, he said, "Forget my offer," and I said, as he expected, "I shall be happy to join your staff."
I reported for work on Monday morning, and was surprised when the office manager said, "You will be going on an audit with Mr. Callahan - wait for him in the reception room."
As I was seated in the reception room, a middle-aged individual with horn-rimmed glasses walked in and we exchanged smiles. "Are you waiting for someone?" he asked.
"Yes, I am waiting for Mr. Callahan," I replied.
"Well," he continued, "I don't want you to wait here. Please come with me," I followed him into a very large corner office where he seated me on a nice leather couch.
He offered me a handsome wooden cigarette box, "Would you care for a cigarette?"
"No sir, I don't smoke."
By then, I knew that I was in big trouble when I heard some commotion in the hallway, "Has anyone seen that new junior?" I excused myself and he said, "It was nice meeting you."
Klein Hinds & Finke was a leading accounting firm because Dr. Joseph J. Klein, Ph.D, CPA, had written the first text on the 1913 Internal Revenue Act. The pecking order within the firm was obvious and precise. There were five partners and a staff of about 50. The senior accountants were mature CPAs with at least 10 years of experience. The semi-senior accountants were all bright fellows who had passed the four parts of the CPA Exam the first time; if not, you were shunned. The junior accountants knew who they were - at the bottom of the ladder.
Mr. Neuwirth's blue pencil
The most senior of the senior accountants was Benjamin Neuwirth. He smoked a Sherlock Holmes-like pipe so that he could read workpapers with ease. He was a stickler for form and accuracy. Every total in the workpapers had to have a double underscore. The firm's workpapers had so many single scores and double underscores that everyone on the staff carried a six-inch ruler.
My first experience with Benjamin Neuwirth occurred early in 1943, when the office manager handed me a set of workpapers and said, "Prepare the company's federal and state income tax returns."
At the time, with the war effort in full force, Congress had enacted an "excess profits" tax with the rate of 95 percent. The tax form was called 1120XP and was based on one of two formulas, namely the invested capital method or the four-year income base period. I selected the invested capital method because it included large bank loans, and I calculated the excess profits tax. The firm had a strict policy for accuracy and legibility, and I was proud of my work when I turned it in.
For reasons I could never understand, the tax returns were given to Mr. Neuwirth for checking. Later that day he called me into his office with the tax returns on his desk, and I could barely recognize my work because of the blue pencil across practically each figure. He said, "You used a 360-day year figure for the bank loans, but the Internal Revenue Code requires the exact days of each month." I looked at the tax due at the bottom of the page and there was a difference of four dollars. "Look what you did to my tax return," I said, and he replied, "You will not make that mistake again."
In 1973, as president of the New York State Society of CPAs, I appointed a Quality Review Task Force to conduct reviews of workpapers on a voluntary basis. The task force included Benjamin Neuwirth, whom I considered a grandmaster of the audit process.
As the saying goes, "The apple doesn't fall far from the tree." Benjamin Neuwirth's son, Paul, was a CPA on the staff and ultimately a partner with Klein Hinds & Finke. When the firm merged into Alexander Grant (now Grant Thornton), both father and son were partners of the merged firm. Following in the footprints of his father, Paul quickly moved upwards and became partner-in-charge of the Philadelphia office of Grant Thornton.
Paul Neuwirth is now an adjunct professor of accountancy and auditing at the University of Pennsylvania's Wharton School of Business, and when he read my reference to his father in "Peer review - reality or fiction?" (Accounting Today, April 4-17, 2005, page 6), he was touched.
Benjamin Neuwirth lived to the ripe old age of 103 and reconciled his bank account to the very end. In a recent letter to me, Paul Neuwirth wrote, "In the last several years, I prepared Ben and Anna's income tax returns. When we got to the bottom line (tax due or refund), if the amount I calculated wasn't what Ben thought it should be, very gently, he would say, 'I think you should check your work. I have a different number,' and he did, having mentally done the calculations before I started on the returns. Of course, each time, he was right. ..."
"During the time of his Quality Review Task Force work," he continued, "I remember Dad discussing, usually at family dinner, the shocking lack of quality of some of the work he reviewed. At the time, and still, I was impressed with the integrity with which he approached that work, so unique for its day."
During his later years, Benjamin Neuwirth suffered from macular degeneration, a disease of the eye suffered by the aging, but what he lost in sight he retained in foresight.
What a wonderful profession we would have if there were more Benjamin Neuwirths.
Eli Mason is a past president of the New York State Society of CPAs, past chairman of the New York State Board for Public Accountancy, and a past vice president of the American Institute of CPAs. He is the recipient of the American Accounting Association's Exemplar Award, and the author of Conscience of the Profession - A Personal Journey.
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