AUDIT OF COMPANIES.

Wanganui Herald, Volume XXII, Issue 6642, 18 October 1888, Page 2

AUDIT OF COMPANIES.

Sevesal newspapers havo expressed thoir opinion, in rolation to tho Bank of NewZealand losses, that tlio Government, should appoint auditors to inspect tho affairs of companies for tho protection of the shareholders and tho public. Tbcro aro several objections to tho proposal which appear insuporablo. A bank accepts a security for an advance. It may bo sufficient at tlio timo, but who can say for an absolute certainty it would bo sufficient in a very depressed Btato o£ tho market ? How thon could a Government auditor any moro than a bank's valuors, dotermino the present and futuro value of property ? Thon again sup r posing, a bank lost heavily in spite of tho protecting hand of a Government official, would not tho Government bo hold responsible, and tho shareholders conic down on that universal provider, tho general taxpayer ? On tho other hand, might not the official, to bo on tho safe side, prevent legitimate business, and so bring an institution to ruin on that sido ? Becauso there aro two ways of coming to grief— tho crawling sleepy way of doing business, as wol] as tho over-speculative method. Some people seem to have got it into their heads that Governments can put everything right, •whereas tho truth is they aro g-ncrally incompetent in the management of business, us witness tho railways. The best thing to do is to let tlio monetary and business institutions of tho colony look after themselves. Somo of thorn will go to tho wull, that could notbosa^d by any precaution, and they will bo no loss. Tho best will survhe. This is the natural order of things, und wo uro fciiro cannot bo roorscd by legislation