CORRESPONDENCE.

Taranaki Herald, Volume XLIX, Issue 11665, 26 January 1901, Page 3

CORRESPONDENCE.

i We ate not reapoiwiule for the opinions exprgMwd by correspondent*. The writer 1 ? same, as a of good faith, must be endowd va the letter.]

AUDITING. TO THK BDITOB.

Sir, — At a late meeting or' shareholders of a local Co-operative Society, a gentleman who i» auditor to several dairy companies made the astonishing statement that it was no part of an auditor's duties to see that the assets were net valued too highly— in fact, he had no business at all with tbe assets as shown in the balance-sheets, or something to that effect. . The late case of Dumbell's Bank in the Isle of Man as reported in last week's Auckland Weekly News where a director received a sentence of five years and the late manager five years penal servitude, may possibly enlighten him on his error. Dealing with the auditors, the judge said " that Rogers being tbe local auditor, and having special means of knowing the character and stability, or rather, instability of the Bank's customers, was the worst of the three, was sentenced to 18 months imprisonment. The other two the Judge further said " Knew the irrcoverable overdrafts could not be treated as good assets, and yet they had assisted the managers to represent them as {assets in the half-year by balancesheets." They must go to gaol for 18 calendar months andjl2 calendar months respectively. The above statements need little comment of mine, but, if a like sentence or two were passed in New Zealand, there would be less perfunctory auditing and given closer auditing, better and more .careful management would follow, to the profit and satis faction of the shareholders, by directors and all concerned. Just a word in conclusion to draw atteution to the stand some, and not a few, directors take up; of course, their want of experience pleads some excuse ; they appear to think themselves the masters and not as they are undoubtedly the paid servants of the shareholders. I may have, with your permission, a few words to say as to secret commissions paid to directors, on work done and goods sold, and delivered to tbe various places, this is possible if not probable.— 4. am, &c, A Shareholder. New Plymouth, January 25th, 1901.