Page 17 Advertisements Column 4

Otago Witness, Issue 1653, 28 July 1883, Page 17

The Chairman: Fifty poundß to each auditor.

Mr J. Smith : Well, it appears to me that that fee represents an amount of work which is not at all commensurate with the magnitude of the interests at stake. It appears to me that £100, aye, or £200 apiece might be paid to the auditors for a thoroughly searching audit — for instance, an audit which, among other things, should include a valuation of the securities held by the Bank. I must confess that I do not think it is sufficient for the shareholders merely to be told in a general way in the report that the securities of the Bank are valued at so much. One would like to know who has valued them, and consequently, whether the valuation is thoroughly trustworthy. _ I merely give that as a sample of the extension which I would wish to give to the audit. It does appear to me, without adopting in toto the very sweeping character of the audit which is recommended by the author who was quoted from just now, that the audit might be made to go considerably further than it does at present, without throwing too great a burden upon the establishment, and without putting the shareholders to too great expense. The amount of money and labour expended in that direction would, I am sure, be considered to be prudently expended. The Chairman inquired if any other shareholder wished to make any remarks.

Mr James Smith : If no one has any further remarks to make, I have much pleasure in proposing a vote of thanks to the directors, general manager, and other officers of the Bank for the valuable services they have rendered during the past half-year. I am sura we all feel that we have in tho.se gentlemen whom I have named and indicated a very competent and zealous staff, in whose hands the interests of the Bank are perfectly safe ; and although the balance-sheet is not quite so encouraging as we might desire, yet I, for one, am quite satisfied that it is as good as, under the circumstances, we had any reason to expect, and I join with one of the speakers in anticipating that in a short time we shall see a far more flourishing state of affairs. Mr James Walker : I beg to second the vote of thanks to the directors and officers of the institution. I think we are all greatly indebted to them for the services rendered.

The motion was carried nem. dis.

The Chairman said : On the part of tho directors, gentlemen, I have to thank you for your expressions of confidence and the vote of thanks you have passed. After objecting to the view put forward by the writer of the article read by Mr E. Smith, I may say there is another part of the article which might be read : •' Finally, over-reliance upon audit is, we repeat, a latent danger to shareholders. Depending upon it as a check upon the Board has a tendency to diminish care in selection of the very best directors. It cannot be too strongly impressed upon the public that this is the point to which earnest attention should be directed. Between the two stools of divided responsibility proprietors run the risk of coming to the ground. It is far better that the limited functions of audit should be clearly defined and understood than that there should be mistaken dependence upon any false safeguard. It is of the utmost consequence that directors should feel that the full responsibility for their acts attaches to themselves solely— that their accounts being passed by the auditors neither condones nor exculpates, and that it be on all hands understood that the true concretion in the balance-sheet of res gestce is the proper function of the auditor, and defines the limit of his responsibility." That is the conclusion of the article Mr Smith quoted from. Of course I would not have you for a moment understand that 1 supposed that in the remarks made by Mr Edmund Smith and Mr James Smith there was anything intended in the way of reflection upon the officers or directors of tho Bank.— (Mr J. Smith : " That was expressly disclaimed.'') It is simply a matter of opinion, and I could not find anything that would better express my opinion than the concluding remarks of the article Mr Smith read from.

Mr J Smith : I beg to say that toy remarks were made entirely in the abstract. Mr E. Smith said ho had marked tho passage the Chairman had read, intending to read it himself. His only desire was to see that the duties of auditors were defined, so that the shareholders might know exactly what to expect from the auditors, and he would be exceedingly sorry if anything that he had said gave annoyance. Mr Georoe Cowie said : It is again my pleasing duty to acknowledge the vote of thanks you have so cordially passed to us. I can only assure you that from the highest to the lowest of us our interests are yours ; that you have a zealous staff, and that I believe your interests will be attended to in the future as they have been in the past. Tho rough minutes were then read, and the meeting terminated.