Anyone who contemplates employing others in business must look ahead and estimate the probability that in the long run he can recover from sales income all he will spend for salaries and wages, materials and supplies, and other charges and expenses of the business, that he can keep his capital intact or be able to compensate for losses, and have a net profit remaining, after taxes, sufficient to warrant the capital employed, risks involved, and abilities and efforts expended. Unless he can see a reasonable prospect of doing these things, there is no inducement for him to give employment. He certainly cannot ask others to contribute finances unless there is a prospect for reasonable returns on the capital employed. If he uses his own money on any other basis, he will probably not long be in a position to give employment. The net yield is to be measured by what remains to the investor after taxes. Whether the investment is in a corporation or a partnership or an individually-owned enterprise, the net result is the figure after all tax payments, corporation or individual.

The subject of internal auditing is receiving increasing attention because of the recognition given by accounting authorities and governmental regulations to its importance in determining the scope of audit necessary as a basis for an independent accountant's certificate. Sometimes people are inclined to think of accounting and auditing standards as those of large business concerns and forget that the majority of business organizations are relatively small. Most public accounting work is with relatively small business concerns. It is well to look at the highest possible accounting standards that can be developed and what can be done where cost is not a major controlling factor. Yet one must remember that small business enterprises still exist and furnish a problem of what can be done best to meet their needs. Hence one need to consider internal audit and control in the small as well as in the large business. Manifestly, if the independent auditors, in making their examination and tests, find that every feature of the accounting has been subject to a careful and adequate internal audit, the auditors can place much reliance on the internal auditing and correspondingly shorten their own work.