ABSTRACT
In his remarks at the half-yearly meeting of the shareholders of this company, the chairman said, “In the December balance-sheet there was a clerical error amounting to £1,746 8s. 11d. This error was made by one of our clerks, a man who had been over twenty years in our service, and who had for many years performed the duties wherein he made the mistake, namely, the final abstracting of the department stock-book accounts into one general sheet, which sheet was signed and given to the accountants as being correct. The clerk omitted to deduct the amount of depreciation allowed in the millinery and ribbon departments from the gross stock, thus causing a false increase in the assets of the sum named. This was found out by Mr. Thomson on the examination of the trading accounts when completed in April. This amount of £1,746 8s. 11d. has also been charged to profit and loss account.” In reply to a shareholder, the chairman is reported to have further stated that “the auditors could not have found out the mistake except by going through every department of the concern.” Possibly the chairman’s remarks are not fully reported, for, while discussions as to the extent of an auditor’s responsibility in relation to quantities and values of stock are frequent and legitimate, it is unpleasant to read the discovery of an error such as the one above described, is to be placed outside the sphere of his duties.
