THE COMPANIES ACT

New Zealand Herald, Volume LXX, Issue 21640, 4 November 1933, Page 15

THE COMPANIES ACT

Sir, —May I protest against the passing of section 140 of the new Companies Act as it now stands. It has been stated that section 140 only relates to accounts of companies registered under the Act. The only accounts worth auditing are those of companies that are registered under the Act. They comprise about 95 per cent of tho large businesses of New Zealand. As most of the others are too small to be able to afford to get their accounts audited by a competent accountant, it leaves very little work for anvone else. The bodies that arc seeking to get this business as a sole right have many of the members admitted without examination, and they are no better than any other accountant of the same status, and their being a member of those bodies should not give them this monopoly. There are plentv of safeguards that could bo adopted if the accountancy bodies in question were really seeking them without going to this extent. Some few days ago Mr. Harold TV. Hudson, F.1.C.A., wrote defending his selections, who wero admitted to the societies without examination. This only serves to strengthen the claim that there are a good many accountants allowed to audit company accounts by virtue of their membership and not by reason of academic qualification. Veritas.

Sir, —Mr. O'Connoll's suggestion that all capital invested in useful industry should carry a State guarantee of safety and reasonable return is yet another of the impracticable schemes submitted of late to hasten a return of the muchdesired prosperity. Most of our factories and workshops have been working short time during the past year or two, yet Mr. O'Connell considers these industries should bo further taxed to provide funds to guarantee capital and profits in other concerns, which may possibly compete with certain of their products. Surely, our industries are sufficiently protected to-day with shipping, customs and exchange charges, and if any industry requires move than this protection it is self evident that its support would not justify tho cost. Furthermore, if tho taxpayer is to guarantee capital and profits, why leave the job to private enterprise at all; the Government would do better to go tho whole way and establish and run the industry itself —it would then be sure of the profits, if any. "Who are these superfluous Government officers to bo appointed to supervise and audit, and what qualifications, have they for controlling now industries? With Government guarantee of capital and profits, what inducement would there be for efficiency in business and what will happen when changes of fashion or new indentions displace tho products? The new Companies Bill now before Parliament will go a long way to restore public confidence, as it will make it much more difficult for dishonest promoters to foist their schemes on the public. The history of company promotion in New Zealand makes unpleasant reading, and the largo percentage of failures should surely convince any reasonable person of the necessity for drastic amendment of tho law. Tho proposed prohibition of share hawking alone will bo a real safeguard to those unversed in the wiles of the sharehawker. Mr. O'Connell concludes in the manner usual to the self-appointed reformer, by accusing those unwilling to adopt tbeir ill-considered schemes of being content to muddle along hoping for a miracle but, in spite of Mr. O'Connell's assertions, much has been done by the Government to assist the country back to prosperity. We cannot blame those in authority for the calamitous world-wide fall in tho prices of primary products, which is the main cause of our troubles in New Zealand to-day. J.A.M.