PROSPECTUS MATERIAL

Evening Star, Issue 20863, 5 August 1931, Page 2

PROSPECTUS MATERIAL

EXTRACTS FROM ACCOUNTANTS’ REPORTS [Special to the ' Stab.’] WELLINGTON, August 4. A question of great interest to ae conntauts and investors, and one which is hedged with great difficulties, was considered at the last meeting of the Executive of the New Zealand Society of Accountants, the president, Mr J. M. Ellilfo (Auckland), being in the chair. The attention of the executive was called to the prospectus of a certain company in winch extracts from reports of accountants were utilised to upport die contention of the promoters that the project would provide largo profits to prospective shareholders. The full reports of the accountants were not printed, but short extracts gave the impression that these authorities were definitely of the opinion that the proposed company should earn, very large profits. While members of the executive considered that n consultation with an accountant is a wise preliminary to the formation of a public company, considerable care has to bo exercised in making reports, especially to avoid predictions as to future profits, as investors may bo misled, particularly if only a partial use is made of tho expressions of opinion from tho public accountant. It was resolved to communicate with the public accountants concerned, advising that tin executive strongly deprecates tho statements made, for the reason that it is an established rulo that a public accountant, in submitting a report covering the affairs of a company must report on facts only, and not on future estimates. As this was tho first meeting of the executive since the formation of the Railway Board, the President expressed satisfaction that Mr G. W. Reid, 8.C0m., dean of the > faculty of commerce, Otago University, and a prominent member of tho society, had been appointed to the directorate. On his motion, tho executive resolved to convey the society's congratulations to Mr Reid. In connection with tho measures which had been previously approved for the relief of members of the society who have suffered losses in tho Hawke’s Bay earthquake, it was reported that expenditure to date totalled £l,lOO.