SALARY RATES OF EMPLOYEES

Press, Volume LXXIII, Issue 21991, 15 January 1937, Page 16

SALARY RATES OF EMPLOYEES

NEW LEGISI^TiO^^HI compaides'«h| auditors' EX Q BIB ?-i|sl HIS DCTIEB^HR The solicitors of the Society of Accountants opinion on the duty of spect of section 17 of the "A public accountant," the'§j^SiM* state, "in auditing the hooks^^^^^i company, has raised certain '"ram^ll upon which you have asked J^^^§ vise. It would seem that tbe'j^o^gg underlying each question is.a^gS-l tially the same, and really aajo^^i this: as to whether a comgaa&SSg&jfi. tor, having regard to knoiFlaaLg^iij. quired in previous audits, is "cbsS l^ or concerned to direct the atteatfetfrc shareholders to the fact thatlSSSSa or claims might be brodghVTwiSjjf employee in respect of arreas at'sat^'i. because it appears to the audifgr 'tf£v the company has not given e&jtf&l the provisions of section 17f8ptiu£ Finance Act, 1936. relating' to' BieaSsH storation of salaries to certaia^agS ployees. . "The problem is raised in tio »•£« cific cases: (a) An employee-ii^M^ actually in the service of a-«»nwnril on March 31, 1931, who now aSf to the auditor to be recehing^fc^Sfe same services a smaller salary ffcaajSJl received in 1931, and Cb) -a parfia&pl position in a company is not nbwMffll by the person who held the pnS«nSߥ 1931, but substantially the samedagefit are to-day being discharged byi.a^sS# much junior employee at a "aaw^g ably lower salary than was paid,fe"*iii|' senior employee on March -stfaffpS/ "The question turns to a bqg^wgE tent upon the interpretation fa'beSlupon the somewhat nebulous?Afrpil tions which have from time Hb^^S-8 been given of an auditor's -duly Jajjpil ticular circumstances. ,* -"SSsSR® "There'must be many cases'£li@g|' a limited liability company** affairs are audited from yearffe^aglf enters into contracts of whichTnoSpfe cord appears on the books nf fhf'lmra of the audit, and in respert:off^j*lf there;may be a contingent*Mtias3& yet in such cases we assgmg ft»»"gjlj auditor would not ordinarily fiK&tws duty to examine current contracb'tefl^l a view to ascertaining whether" cr^Btrf" the company is likely to be inWinSjE in liability,' and with that possfiaMi in view qualifying his repnrfr Affqrpi ingly. ' : ',^D^j2f. "It seems to us that a'-contraiiiofl-service is iri very much the; satne'pß^f"' tion as any other, contract^'eßtefidpi j into by the company. Atthe'-mSSM we assume that no claim haPbSlmade by the employees concerne^-andl-it seems to us that it is notrpar?«P the auditor's - duties by taggjagVa*® balance-sheet to raise a questip^ii* respect of a liability which may bctk.| accrue. He may, of course, feeljcSt-if strained to mention the matter^SS director or directors, in case tbcwS*f sible obligation has been oveldakedj^ but that is a very different flrifpffit tagging the balance-sheet t -v£#f" "It comes to this, therefore, fbatM* our view an auditor who takesoprafe himself the responsibility* of adjnd£& eating whether or not a particular aS* ployee inay or may not be enfinedta^ an increased salary under secaan^Kl of the finance Act, 1935, is bscoH!^'¥ ; a detective and going !beyaae^feef duties which his appointment '.Bs>-a£& auditor require of him." "*:---"