ABSTRACT
In our last issue but one we gave an instance where auditors very rightly objected to proceedings which they did not think the directors of a company were justified in adopting, and we now are in a position to give the details of a still more flagrant case where auditors most properly have taken a firm stand and adhered to their position. The issues raised are between Messrs. Langton, Holmes, & Mc Crindle, a well-known firm of public auditors in Melbourne, and the directors of the Anglo-Australian Bank (Limited), whose accounts are audited by that firm. The paper we quote from states that they have by their action “justifiably repudiated the notion often held by directors of companies that the functions of auditors are confined to merely vouching the arithmetical accuracy of the entries in a statement of accounts, and that there has been by far too much subserviency in this view of the duties of auditors shown by the profession in Australia.” The case between the auditors and the directors has been recently placed before the shareholders, and it appears that Messrs. Langton & Co. were requested to give “a certificate of the clerical accuracy of the books.” Had they merely done so, however, they would have ignored the spirit of the Articles of Association, which set forth that the auditors “shall make a report to the members upon the balance sheet and accounts, and in every such report shall state whether, in their opinion, the balance sheet is a full and fair balance sheet, containing the particulars required by the regulations of the company, properly drawn up so as to exhibit a true and correct view of the company’s affairs,” etc. The article, however does not add the clause in Table A as to explanations from directors.
