AUDITING ACCOUNTS.

New Zealand Herald, Volume LXIV, Issue 19762, 8 October 1927, Page 14

AUDITING ACCOUNTS.

DAIRY BOARD MEASURE. RESENTMENT IN LONDON. POSSIBLE MARKET EFFECT. Belief that there is more than mere coincidence in the fact that the enforcement of limited dairy control on Sep tember 30 has been followed in the past few days by a drop of 2s to 4s in the London butter market, is expressed by some exporters'in the trade in Auckland. Colour is lent to the suspicion by the fact that up to a few days ago the dairy market in London was at a high level, with every indication of exceeding 184s, but cablegrams received in Auckland yes terday quoted butter at 178s to 182s, although cheese remained firm at values up to 106s. While there is no cause for_ pessimism concerning a market which yet remains at a quite satisfactory level, it is competent to seek the reason for the slight decline in face of a forecast advance. It may be found, well-informed city men con sider, in one clause of the limited control regulations given effect at the end of last month—that relating to the compulsory auditing of accounts, a measure which under free marketing appears to contain the elements of friction in business. Inter alia, the clause states that any tirm or company to which butter or cheese is exported for sale on consignment shall, on request, or on behalf of the dairy factory concerned, or the board, permit its accounts to be audited from time to time, such audit to be confidential except to the parties- Provision is made for furnishing to the London office of the board copies of the account sales and other statements from time to time ren dered by London firms to their New Zea# land principals. It was not difficult to see why auditing of accounts under free marketing was deemed a far more objectionable practice than under absolute control, said nieichants approached. Then, merchants bought openly at a fixed price from the board, but to-day there was competition in bidding and selling in a quite different sense, and an objection to compulsory auditing was to be expected for obvious reasons. The representative of one large firm said that while it was stated the informa tion wouid remain confidential, it had to be borne in mind that the National Daily Association, itself a competitor in the market, had access to the Dairy Produce Board's information. More than that, three members of the board were them selves connected with London houses, and apparently would possess knowledge of peculiar advantage through the auditing of accounts. When it was remarked that cheese was remaining firm at a highly payable level, the exporter said that, however incensed London interests might be at the audit ing system, they could not avoid buying when New Zealand possessed, as it did, a monopoly of the English cheese mat ket. But in times when supplies from several countries were more free, they might effectively express their sentiments in cheese values, as well as in butter. One Auckland house at least has received a cablegram from London stating that resentment is being felt at what appears to be the most objectionable feature of limited control.