JUST SO.

Manawatu Standard, Volume XI, Issue 1687, 17 April 1886, Page 2

JUST SO.

Onr leader ot last night concluded with the expressed opinion that insufficient auditing frequently afforded scope for dishonesty by employes of monetary institutions. We have a strong confirmation of this, assumption m the following extract from tha Now Zealand Times : — A striking illustration of the worthleasness of the system of a.udit too often now adopted by public companies is furnished by some remark, able admissions made at the recent meeting of shareholders m the late Commercial Bank of South Australia. Mr Yuill (one of the auditors), when questioned by a shareholder, said that there was a deficiency of £7,600 m the cash, and so far as the auditors and directors were concerned they cohld not possibly find this out. "I find," he said, prior to tho date ot the audit sealed euvelopes were sent to some of the other banks, and the banks actually credited that amount without ascertaining whether there were securities m them." Another explanation offered was as follows: Cl -Mr Wilson described to me the ingenious process by which—by the sealing up of certain things declared to be of the nature of cash, or the equivalent of cash, and by the transfer of these to the castody of the bank— a receipt was got and the auditors were deceived ; for anything that the bank that received it and vouched for it knew it might have. contained wooden shavings." Under such a system, or ' rather non-system, as this, it is evident that the detection of irregularities is rendered highly improbable, so that the usefulness of auditing fails at the very point where it is most needed. A radical reform is clearly most necessary.