ABSTRACT
Take another case. Another big firm of auditors. Another big bank. Do bank shareholders actually believe that each time a balance-sheet is sent to them, with the customary few lines below by way of certificate, that all the securities have been carefully gone into? Do they imagine that because some well-known firm sign such certificate that that is a guarantee that all the securities are safe and right? If so, they are wofully mistaken. In this second instance, the firm of auditors compared the amount of the loan with the securities as entered in the books of the bank, and on that gave their certificate. That requires a little further explanation. Some of the auditors’ staff would attend the bank during the half-year and go over the securities themselves, and see if they were duly and properly entered in the books, which would then be initialled. When the actual audit came on, if the security books were turned to and the entry found duly initialled, the auditors would be satisfied. Of course everyone can see that the bank officials, had they been so disposed, could easily have given up the security or taken it away without making any record in the books. How could the auditors discover this?
