Fraudulent concealment of a book:
Hence it is nothing to him where dividends are properly or improperly declared, and provided he discharges his own duty to the shareholders. In fact his business is to ascertain and state the true financial position of the company at the time of the audit, and his duty is confined to that. But still then comes the question, that how is he to ascertain that position? Therefore the answer is, regarding to examining the books of the company. Further he does not discharge his duty by doing this without including inquiry and without including take any trouble to see that the books themselves show the company's true position. Hence he must take reasonable care to ascertain that they do so. Except he does this his audit would be worse than idle farce.
Assuming the books to be so kept as to show the company's true financial position, the auditor has to frame a balance showing that position according to the books and to certify that the balance sheet represented is correct in that sense. Therefore his first responsibility is to examine the books, not merely for the purposes of ascertaining what they do show, but also for the purposes of satisfying himself that they show the true financial position of the company....... An auditor, conversely is not bound to do more than exercise reasonable care and skill in making inquiries there, and investigations. However he is not an insurer; he does not guarantee that the books do correctly show the true position of the company's affairs; he does not even guarantee that his balance sheet is accurate according to the books of the company. Whenever he did so, he would be responsible for error on his part, even whether he were himself deceived without any want of reasonable care on his part, speak through the fraudulent concealment of a book from him. So his obligation is not so onerous as this.