Banks and State Audit.

Oamaru Mail, Volume XXI, Issue 6763, 10 December 1896, Page 1

Banks and State Audit.

Tho Bulletin concludes an articlo on tho Queensland National Bank rovolations in these terms : The moral of tho Q.N. Bank disaster is the same old moral. Its leading features are that balance-sheets are largely waste paper ; that auditors' certificates are of no value whatever, because tho certificate tells the same old story whether things aro good or bad ; that private audits are a mockery; and that directors and managers tell tho whole exact truth when it su ; ts them. The Q.N., like every other bank which has gono wrong, showed a prosperous and duly-audited balanoe-sheeb right up to the day when its awful deficiency came to light; therefore, the bank shareholder who relies on tho big, prosperous report of any largo concern with a million paid-up capital and a million reserves, and a 10 or 15 per eent dividend and a liberal balance to carry forward, would do well to remember that almosb every bank shows things like these till the bottom falls out, and thab his concern, too, may have been insolvent for ten years past for all the evidence to the contrary. And until there is a regular system of State audit these things will continue to be so. The Q.N.B.'s requesb for a State report on its condition was a tacit acknowledgment thab private audits and balance-sheets are such well-known lies that they are wholly usoless in an emergency. Further, it was a tacit acknowledgment thab state audit is a lob more reliable bhan the private article. The banker's precept in good times and his practice in bad ones are woefully dissimilar.